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Indian rubber prices trading low as cheaper imports flood market
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Indian rubber prices are trading at the lowest in 17 months on weak demand in the market. The most watched rubber grade, RSS 4, is trading between Rs 117 and 119 per kg for the last two sessions. The rubber prices are down for more than 3% in the past two months. The Indian rubber …
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Indian rubber prices are trading at the lowest in 17 months on weak demand in the market. The most watched rubber grade, RSS 4, is trading between Rs 117 and 119 per kg for the last two sessions. The rubber prices are down for more than 3% in the past two months.
The Indian rubber prices take cues from the global trends, which have been on the weaker side.
The widely trade Tocom rubber prices have declined 9% in the current year on back of rising inventories in the global market. The strengthening of Japanese Yen against US dollar and the uncertainty arising out of trade tension between China and the US is also affecting the market.
The pressure is building up after three main global rubber producers Thailand, Malaysia and Indonesia ended the three month curb on natural rubber exports on March 31 by 350,000 metric tonne.
Increasing import for cheap prices has also affected the domestic rubber.
The Malaysian rubber prices are quoting Rs 92 per kg and even with the 25% import duty that India has levied, the landed rubber cost Rs 115 per kg still cheaper than the domestic price.
India produced 700,000 tonnes of rubber in 2017-18 against the demand of 1.2 million tonnes, falling short of both the demand and the production target.
The rubber products industry is also facing a difficult situation as the import duty between 0 and 10%, the market is flooded with cheaper imports.
Reports suggest that nearly 40% of the industry is headed for a shutdown with higher costs of ingredients such as carbon black and zinc oxide.
The industry now awaits the the natural rubber policy that has been in making for some months now. It is expected to finalised by June end.
The policy is expected to address allocation of fund for the Rubber Board and also the minimum support price for rubber among other concerns.
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