IGI Logo

MARKET OUTLOOK

Sentiments stayed sanguine In the natural rubber market last week, though concerns over the new Covid-19 variant dampened the market sentiments towards the close of the week. Japan's Osaka rubber futures had jumped to six-month high last week before retreating. In the Indian market, RSS4 grade rubber hit its strongest level in more than eight years. The grade was quoted around Rs.191 a kg, highest since August 2013 on supply concerns. Continuous rain in the major natural rubber growing regions in Kerala have hindered the tapping and other production related activities, which is raising concerns over supplies. Cues from the overseas market too lend support.

The Automotive Tyre Manufacturers Association (ATMA) on have urged the government to allow duty free imports of natural rubber in the extend of supply-demand gap as severe availability crunch in natural rubber is adversely affecting production process at the tyre manufacturing units.

The Association of Natural Rubber Producing Countries, based on the preliminary estimates updated by member governments, the outlook on global production of natural rubber (NR) is seen growing by 1.8% to 13.836 million tonnes, while global demand is projected to grow by 8.3% to 14.028 million tonnes during 2021.

Indonesia's 2021 rubber exports will likely stay at the same level as those of 2020 at 2.45 million tonnes according to Erwin Tunas, executive director of Rubber Association of Indonesia (Gapkindo). Indonesia shipped out 1.82 million tonnes of natural rubber in January to September 2021, up 0.97% compared with 1.8 million tonnes exported in the same period last year, Gapkindo data showed.

Torrential rains in Kerala have devastated crops spread over 18,764.72 ha, leading to a loss of 2.81 bln rupees to farmers. Nearly 74,780 farmers in the state have been affected by landslides and flash floods, said Deepthi Varadan, a senior official at the state's Department of Agriculture Development and Farmers' Welfare. The districts that have faced major crop damage include Thrissur, Malappuram, Ernakulam, Kottayam, Palakkad and Alappuzha, she added. Idukki, the largest producer of cardamom, is staring at crop losses of 75.7 million rupees, with 4,651 farmers being affected. As per a first information report on crop loss filed by the state farm department, so far, over 7,135 ha under paddy (mainfield), 6,026.9 ha under banana (bunched and non-bunched), 1,468.6 ha under rubber (tapped and untapped), 743.7 under vegetables (with and without pandal), and 496.5 ha under tapioca have been damaged.

Kottakkal Arya Vaidya Sala has entered into an agreement with the Rubber Board to help rubber farmers cultivate medicinal plants as intercrops. Arya Vaidya Sala will help farmers cultivate 13 medicinal plants in their plantations, especially during the first seven years after planting the rubber. Rubber Board and Arya Vaidya Sala officials said here that cultivating medicinal plants as an intercrop in the initial years of rubber planting would help the farmers tide over their lean years. Herbal cultivation can be continued until the farmers start tapping their rubber trees.

The Northeast Frontier Railway (NFR) has commenced the transportation of rubber sheets and products as a new stream of goods traffic from Tripura to various destinations. Eventually, substantial production of rubber sheets takes place in Tripura. According to reports, more than 90,000 tonnes of rubber is produced annually in Tripura, having about 87000 hectares of rubber plantation. Tripura exported more than 53000 tonnes of rubber during the financial year 2020-21 to places like Jalandhar, Ludhiana and Delhi.

RUBBER MAY FUT

Dips to 234/224 may not be ruled out before bouncing back. A direct rise above 260 accompanied by considerable volume may strength the positive momentum.

RUBBER DEC FUT

While the sentiments stay positive, corrective dips to 18900/18650 ranges may not be ruled out. However, a direct rise above 19400 may probably call for a revisit to recent highs or even more.

To Read Complete Report & Disclaimer Click Here

For More Geojit Financial Services Ltd Disclaimer https://www.geojit.com/disclaimer 

SEBI Registration Number: INH200000345

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer