Malaysia Rubber Prices Bullish, India Natural Rubber Record High

Malaysian Rubber Board's official physical seller price for tyre-grade SMR 20 surged 53 sen to 1,646 sen per kg from 1,593 sen last week. India's production of natural rubber in 2010 is estimated at around 8.5 lakh tonnes, whereas the total demand for natural rubber in the country is nearly 10 lakh tonnes per annum.

Rubber prices are expected to continue to scale new highs next week, says a dealer. Natural rubber prices in the global market touched a fresh high of Rs 250 per kg as strong demand from China and the US is fuelling the prices of the commodity.

The dealer said solid demand and a tight supply due to the rainy season would continue to keep the market bullish. "We will see the bad weather pushing prices while the high crude oil price will also boost the market," a dealer said. He said the wintering season is expected to continue until April.

Latex in bulk rose 24 one sen to 1,028.5 sen per kg from 1,004.5 sen previously. The unofficial seller closing price for tyre-grade SMR 20 rose 56.5 sen to hit 1,656.5 sen per kg from 1,600 sen last week, while latex in bulk increased 22.5 sen to 1,030.5 sen per kg from 1,008 sen previously.

Continuing its gain for the third straight week, natural rubber prices today touched all time high of Rs 230 per kg on strong global cues.

Prices of natural rubber, a key component for making tyres, today closed at Rs 230 per kg in Kottayam and Kochi, which accounts for 90 per cent of the country's production.

According to industry sources, the rally in natural rubber prices is due to the surge in prices of the commodity in the international market.

"International prices are at record high level and are likely to remain at that level in near future due to strong demand," Indian Rubber Dealers Federation Treasurer Ibrahim Jalal has said. Domestic prices are following the international trend, he added.

A surge in demand from the US on the back of better-than-expected growth in the automotive segment is further pushing the global prices of the commodity and the impact is also felt on the domestic market, said an expert.

However, the present rally in the prices of commodity is due to the global cues as the supply situation in the country has improved, Jalal said.