Byline: Nidhi Sharma

MUMBAI: There are mounting concerns about the availability of natural rubber in the local markets as warehouse stocks are reducing, while growers and dealers are not bringing their stocks to markets expecting a further rise in price. Rubber price has significantly

"Rubber is not being traded for the user industry. It has happened for the first time in decades that despite high price, availability of rubber in the market is a matter of concern," said Rajiv Budhraja who is the director general of Automative Tyre Manufacturers' Association. Meanwhile, the gap between local and international price is narrowing and it may help the importers but high import duties on natural rubber has kept the importers away. A rise in crude oil price, nearing $120 per barrel has supported the rubber prices but the major concern is availability that is pushing up the prices. Rise in crude oil price is expected to shift demand from synthetic rubber to natural rubber.

Rains in the major rubber growing regions - Thailand, Malaysia, Indonesia and India has affected tapping. According to traders if monsoon arrives early in India it can affect the rubber supplies. Tapping has already been affected due to untimely rains in rubber growing parts of Kerala.

According to George Paul from Geojit Commodities the high consumption rate in comparison to production rate in unlikely to keep the prices subdued though technical correction can take place in May futures on NMCE. The May futures on NMCE closed marginally up at Rs 11,721 per 100 kg, while the June futures closed up at Rs 11,501. In the international market the futures on Tokyo exchange closed up at Rs 114.73 per kg against previous close at Rs 112.84, while the physical price in Malaysia for SMR20 variety closed up at Rs 107.48 against the previous close at Rs 1,065.75.

The stocks in NMCE warehouse have come down to 1,742 tonne, while the open interest for the May is 2,100 tonne. Rubber trader Bijosh P Thomas feels that price in the futures market is likely to go up by Rs 5 per kg for the June and July contract. He, however, feels that price in the physical market will not go beyond Rs 120 per kg.