India Rubber: Prices up in Kerala on robust local demand, global cues

Prices of natural rubber rose in the key markets of Kerala as demand from tyre makers and other major buyers continues to improve, traders said. Markets resumed trade after a three-day break for the Diwali festival.

* "Both sectors of the consuming industry-–tyre and non-tyre–have recovered from the impact of the pandemic and business is in full swing," said K.N. Raghavan, chairman and executive director of Rubber Board.

* Demand for tyres will be driven by growth in the automobile sector following an uptick in rural sales, increased preference for personal transport, and festival season demand, traders said.

* "Tyre companies are seeing good demand for tractor and two-wheeler tyres. During Jul-Sep, production was good and the current quarter to December will hopefully be better," said Rajiv Budhraja, director general of Automotive Tyre Manufacturers' Association.

* Early gains in the global market further supported rubber prices in the domestic market, said Raju Varghese, the owner of Polachirayil Traders based in Kottayam.

* Benchmark rubber contracts on the Tokyo Commodity Exchange were up in early trade on hopes of recovery in demand from China, the largest consumer. Recently, China marginally raised its consumption outlook for 2020 in view of earlier-than-expected economic recovery and acceleration in growth.

* Concerns over a fall in global supply also supported rubber prices on the TOCOM. Unfavourable weather conditions in key growing areas of Thailand, the largest producer, have raised concerns over output, analysts said. 

* However, the most active April contract on TOCOM ended in the red due to profit booking after a recent rise in prices.

* Following are highlights of today's trade:

 –In Kochi and Kottayam, the widely-traded RSS-4 variety was sold at 155-157 rupees per kg, up 1-2 rupees from Friday.

 –The most active April contract settled at 225.9 yen (about 161.33 rupees), down 4.3 yen on the Japanese bourse.  End