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Monday, May 17, 2010

Natural rubber prices fall 10% in one month

Natural rubber prices have fallen by about 10 per cent in the last one month from its peak of Rs 170 a kg taking cues from global markets, where rates have declined on concerns over Greece's debt crisis, experts said.

"India is integrated with the international market. Whatever happens overseas will reflect here too.

Prices have fallen so sharply because the Greek sovereign debt crisis has hit commodity prices in foreign markets and rubber has fallen there, which has caused this sharp fall," Indian Rubber Growers Association General Secretary Siby J Monippally said.

The price of natural rubber (RSS-4 variety) fell to Rs 154 a kg on May 15 at both Cochin and Kottayam markets from Rs 170 a kg a month ago, according to Rubber Board's data. At Bangkok, prices are currently ruling at Rs 157.46, down from Rs 180.36 on April 26.

Besides the Greek financial crisis, global prices have also been hit due to less demand from China, a major consumer.

"The drop in domestic prices has no relation with demand and supply. It is just that prices in Tokyo and Bangkok affect prices here. There is less demand from China, which is a big consumer, in the international market. This has affected prices here," Cochin Rubber Merchants Association President N Radhakrishnan said.

Demand for natural rubber in the domestic market is robust from tyre manufacturers, he added. In the short-term, experts feel that prices would remain stable in the range of Rs 140-150 a kg.

"Unless there is an event, which is out of our control, rubber prices are going to remain in the range of Rs 140-150 a kg over the next 2-3 months," Rubber Dealers Association President George Valy said.

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