Prices of natural rubber in Kerala rose today due to improved demand from domestic stockists after a recent fall in prices.
* However, sentiment remains weak as tapping in key growing areas has resumed after it was halted during Jun-Aug due to rainfall. With weather conditions improving and tapping picking up, production will improve and prices will likely remain under pressure, said Raju Varghese, the owner of Polachirayil Traders based in Kottayam.
* Inventories with tyre manufacturers have piled up as lifting of stock from factories has almost stopped.
* Sluggish demand from tyre makers and bulk buyers is also seen weighing on sentiment. Demand for tyres, which accounts for 65% of total demand, is dwindling as production of automobiles has been severely hit due to the COVID-19 lockdown, traders said.
* Prices of rubber on the Tokyo Commodity Exchange were unavailable today as the exchange was shut on account of a public holiday. The bourse will remain shut on Tuesday as well on account of Autumnal Equinox, and will resume trade on Wednesday.
* However, the outlook for rubber contracts on TOCOM remains firm as global production of the commodity is expected to be lower in 2020. The Association of Natural Rubber Producing Countries cut its forecast for global output in 2020 to 13.15 mln tn, down 4.9% on year.
* Following are the highlights of today's trade:
–In Kochi and Kottayam, the widely-traded RSS-4 variety was quoted at 131-132 rupees per kg, up 1-2 rupees from the previous close, traders said.
–On Friday, the most-active February contract on the Japanese bourse settled at 186 yen (about 131.24 rupees) per kg, up 0.7 yen from the previous close.
US$1 = 73.38 rupees
