NMCE rubber prices settled marginally lower Tuesday amid subdued demand with buyers mostly staying away hoping further fall in prices. Closure of TOCOM market yesterday due to domestic holiday was also adversely affects the market sentiment.
According to rubber board, India's natural rubber output in October rose 3.6% from a year earlier to 87,000 metric tones. Increase in tapping days because of conducive weather led to higher production. But, in the April-October period, rubber production in India, the world's fourth-largest producer, fell 9% on year to 436,000 tons.
In the mean time, India's natural rubber import hit a record high of 126,000 tonne during Apr-Oct, according to provisional estimates of the Rubber Board. The increase during Apr-Oct is a good 219% year on year, according to the board. According to projections by the Automotive Tyre Manufacturers Association, natural rubber import may touch 150,000 tn in 2009-10. According to latest report from International Rubber Study Group, Global rubber supply may jump 30 percent by 2015 and may increase by 50 percent by 2020, due to dramatic increase in total new planting. In 2008 total new planting is estimated to have reached around six times the level of 2000.
Global natural rubber output in the January- August period is expected to fall 8.5% from a year ago to 3.66 million metric tons, the Association of Natural Rubber Producing Countries said Friday. However, the estimate doesn't include production in Indonesia, which fell an estimated 6.3% during the January-July period to 1.59 million tons. In Indonesia, the government collates data with a lag.
According to the latest report from Association of Natural Rubber Producing Countries, the rate of decline in natural rubber supply was accelerating worldwide due to lower output in all major growing regions. Natural rubber output in the January-August period in Thailand, the world's largest producer, was 1.9 million tons, 8.3% lower from a year ago. In Malaysia, production in the January-September period was 24% lower, while in India it was down 11%. The only major country which has reported gains in output is China, where output grew an estimated 28% in the first nine months of 2009.
Lower output and weak demand during the first half of 2009 also affected natural rubber exports. Thailand's exports in the January-August period were 8.7% lower, while Malaysia's January-September exports were down 34%. India's exports have been negligible. NMCE rubber moved in the range of Rs11325-11220 last traded at Rs11250 (11280) Open interest increased by 57 to 1692. Rubber stocks at NMCE accredited warehouses increased by 66 to 762 Mt.
INTRADAY OUTLOOK
NMCE Rubber December futures support lies at 11205 and 11160. Resistance is at 11310 and 11370.
Courtesy: JRG Wealth Management
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