India Rubber: Hits 1-wk high on bargain buying, tracking TOCOM gains

The most-active May contract of rubber hit a one-week high of 13,127 rupees per 100 kg on the Indian Commodity Exchange today, due to bargain buying by market participants after prices hit a one-month low on Friday, traders said.

The contract ended at 13,052 rupees per 100 kg, up 1.9% from the previous close.

Gains in the benchmark contracts on Tokyo Commodity Exchange also supported the uptrend on ICEX, said Raju Varghese, the owner of  Kottayam-based Polachirayil Traders.

Rubber contracts on TOCOM rose following concerns over supply due to lower production estimates. According to the Association of Natural Rubber Producing Countries, global natural rubber output fell more than 10% on year to 1.08 mln tn in January.

Expectations of a rise in crude oil contracts on the New York Mercantile Exchange also supported rubber contracts on the Japanese bourse, traders said. Rubber prices take cues from those of crude oil as the latter is used to manufacture synthetic rubber, a substitute for natural rubber

The most-active September natural rubber contract on the Japanese bourse ended at 191.5 yen (around 119.02 rupees) per kg, up 0.2% from the previous close.

In Malaysia, the SMR-20 grade variety was quoted at $154.40 per 100 kg, down 51 cents from the previous close, according to Rubber Board data.

However, a fall in rubber prices in key spot markets of Kerala capped gains on the domestic bourse. Prices of natural rubber fell in key spot markets of Kerala due to tepid demand from tyre manufacturers and on expectation of a rise in imports of the commodity, traders said. 

Currently, activity in key spot markets of Kerala is subdued as trading has not resumed in full flow after the Vishu holiday on Monday. Trade will likely gather pace from Apr 23, said Joy Alencherry, owner of Kottayam-based Maria Rubber Links.

In Kochi and Kottayam, the widely traded RSS-4 variety was sold for 127-129 rupees per kg, down 1 rupee from Saturday, traders said. Markets were shut on Monday on account of Vishu festival.

However, data from India's Rubber Board showed that prices of the RSS-4 variety in Kottayam and Kochi remained unchanged at 128.50 rupees per kg.