Prices of Rubber Commodity Decline in May 2011 per KG, Domestic India

Domestic rubber prices are likely to decline by over 12 per cent to Rs 200-215 per kg this month on higher domestic supplies due to ongoing tapping in Kerala and Tamil Nadu, according to industry experts.

The commodity prices have been falling since April 25; they closed lower last week at Rs 228 per kg after touching this year''s high of Rs 241 per kg last month.

Indian Rubber Dealers Federation (IRDF) and Cochin Rubber Merchants Association (CRMA) have said that domestic prices could further decline in the range of Rs 200-215 per kg by month-end on expected higher supply in the domestic market.

"We expect the prices to decline further in the coming days as tapping will continue till May-end," IRDF President George Valy told PTI.

Tapping generally takes place in summer till the commencement of south west monsoon.

CRMA Ex-President N Radhakrishnan said, "The rubber price outlook seems weak for May as more supplies are coming into mandis. I think they would rule at around Rs 215 per kg."

He also said that farmers could hold back the stock after May 20 in anticipation of higher prices.

Even in the global market, rubber supply is expected to rise in the coming days in major rubber growing countries where tapping has begun. As a result, prices are also expected remain on a sluggish side, said an analyst with commodity brokerage firm Geojit Comtrade.

With the Reserve Bank increasing short-term borrowing rates and its likely effect in terms of higher interest on auto loans may also weigh in on the domestic demand for this commodity, he said.

Meanwhile, the domestic futures prices of natural rubber are expected to trade on the weaker side in line with the global market and strong industry fundamentals.