Mumbai: Natural rubber prices in India are likely to rise this week on good demand from tyre-makers, though higher stocks with farmers and traders may limit the upside, dealers said on Tuesday.
“Demand is there from tyre makers, but improvement in prices is prompting farmers to release old stocks. They have been holding stocks for a long time,” said a member of the Indian Rubber Dealers Federation.
At the end of May, stocks in India stood at 249,470 tonnes, compared with 187,750 tonnes a year ago, data with the Rubber Board showed.
Rainfall has slowed in the biggest rubber producing Kerala state in the past few days, helping farmers to raise tapping, the member said.
On Tuesday, price of the most traded RSS-4 rubber (ribbed, smoked sheet) in the key Kottayam market in Kerala, closed up Rs 300 at Rs 21,450 per 100 kg.
The benchmark August rubber contract on India’s National Multi-Commodity Exchange (NMCE) provisionally closed 0.03% higher at Rs 21,652 per 100 kg.
Key Tokyo rubber futures settled slightly lower amid a lack of fresh trading cues after the market had already factored in encouraging factors such as signs of improvement in the US economy and easing of the Greek debt crisis.
India, the world’s fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.
Global natural rubber production was forecast to rise to 9.936 million tonnes in 2011, lower than a previous estimate of 10.025 million tonnes, due to output revisions in Indonesia and the Philippines, industry group ANRPC said last month.
India’s production for the current financial year is estimated at 902,000 tonnes and consumption at 977,000 tonnes.