India tyre makers buy rubber at record $4.69 per kg

Friday, 7 January 2011 00:40 - - {{hitsCtrl.values.hits}}

Mumbai (Reuters): Indian tyre makers bought natural rubber at a record 212 rupees ($4.69) per kg on Wednesday as sellers raised prices after a surge in the international markets, head of a dealer’s body told Reuters.

Tyre makers were struggling to secure required supplies as dealers were diverting stocks into warehouses and many farmers were also holding their stocks, expecting a further rise in prices, George Valy, President of the Indian Rubber Dealers Federation, said.

“Every day, farmers and dealers are quoting higher prices due to rising prices in international market. In Thailand rubber is more expensive than the local markets,” Valy said.

Spot rubber price in Thailand, the world’s biggest producer and exporter of natural rubber, rose by $0.10 to $ 5.15 per kg.

The stocks at accredited warehouses of National Multi-Commodity Exchange (NMCE) more than doubled in a month to 7,156 tonnes, data with the exchange showed.

On Wednesday, the far-month April rubber contract NMRUJ1 on NMCE was trading nearly 18 rupees per kg higher than the near-month January contract NMRUF1, prompting dealers to hold stocks.

“Tyre companies can wait for a day or two, but they have no option as normally no-one keeps inventory of rubber for more than 10-12 days. Whatever is the price one has to buy it,” A.S. Mehta, Director Marketing at JK Tyre (JKIN.BO), said.

India’s natural rubber output in December edged up by 0.6 per cent to 101,500 tonnes as favourable weather allowed farmers to increase tapping, the state-run Rubber Board said in a statement on Monday.

“Weather is very favourable for tapping. In January 2011 production would be higher than January 2010, but we have to see how much production comes in to the market,” Valy said.

The world’s fourth-largest producer last month cut import duty on natural rubber to 7.5 per cent for shipments up to 40,000 tonnes until 31 March.