India Glue Price Rise Is Not Abnormal

- Jul 12, 2019-

Mumbai natural rubber prices appear to be challenging the market.

In kerala's spot market, the price of natural rubber is expected to rise 7 to 8 per cent from current levels to rs 160 to rs 165 per kg in the next four to six weeks, although market participants expect the country's production to increase in 2019 to 2020.

But through the phenomenon to see the essence, India gum prices continue to rise, the key is the spot supply is still under pressure.

In addition, the global rubber market supply and demand trend is also a driving factor.

India's natural rubber production is expected to grow 15.7 percent to 750, 000 metric tons in 2019-2020.

In general, increased production puts downward pressure on commodity prices.

But India's rubber supply is still tightening due to some irresistible factors, so pricing is an exception.

Kerala produces more than 80 per cent of India's rubber but last year excessive rainfall and flooding in the region kept supplies tight.

To add insult to injury, the disease spread to rubber plantations, causing abnormal shedding of leaves that affected yields.

These factors add up to cause glue prices all the way up.

Today, rubber prices are at their highest level in two years.

At present, the subsequent market impact of force majeure has not completely dissipated.

The widely traded rs-4 varieties are selling at RS 151~153 per kg in kochi and kottayam, up by RS 1~2 from the previous closing price.

According to official figures, India's natural rubber production fell by 7.5% in 2018-19.

And inventories at the end of march were down sharply from a year earlier, given domestic production shortages.

In the past few months, many small growers have stopped mining rubber because of reduced yields due to high temperatures.

This is bound to exacerbate the supply crisis.

Growth in the Tokyo mercantile exchange's rubber contracts is also seen as a key factor supporting India's spot prices.

Rubber futures rose as global production fell.

According to the association of natural rubber producing countries, global natural rubber production fell 5.2 per cent from the previous year.

If global trade tensions continue to rise, crude oil prices could fall, which would also put pressure on supplies in the rubber market.

Moreover, in March the international tripartite rubber council of Thailand, Indonesia and Malaysia agreed to cut production from April.

The supply situation in the international market is not optimistic.

It is not hard to understand why India is raising prices in response.