Posts Tagged ‘rubber futures’

RUBBER – STRETCHING & MOVING ON THE WAY AHEAD Part 1

Hello Friends here we come up with another write up on “Commodity Corner Series”.

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Topic is RUBBER ………… “STRETCHING & MOVING ON THE WAY AHEAD”

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RUBBER - STRETCHING & MOVING ON THE WAY AHEAD

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We would touch upon aspects like the investment scenario of rubber in India and price movement of the rubber in Indian market.

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We would also read about the gap in the demand and supply of the rubber in the market.

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Rubber is springy & has the potential energy of getting stretched.

These properties are also seen in the price movement of the prices.

The year 2009, has given stretchable & phenomenal return on investing in rubber futures.

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INDIAN SCENARIO :

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The four-month period between October and January is the peak season of rubber output in the country.

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The total area of plantations in the country is 662,000 hectares of which 92-93 per cent is in Kerala.

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Tripura is the second-largest rubber planting state in India after Kerala.

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DEMAND & SUPPLY GAP –Walkthrough 2009:

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As we know that profit increases when the difference or the gap between the cost price & the selling price increases.

This immense gap was witnessed in rubber prices.

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Tight supply & tracking the rise in Asian markets like Tokyo and Singapore gave momentum to the prices to rise through out the year.

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The Indian industry consumed 356,400 tonnes of natural rubber (58 per cent of the total domestic consumption) during April-November.

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In April-November, natural rubber production in India dropped 6.5 per cent at 538,125 tonnes against an increase of 3.5 per cent in consumption at 614,600 tonnes.

So there was a gap of 76,475 tonnes in production and consumption.

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PRICE MOVEMENT “Focus on the journey, not the destination”:

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The spot prices at the benchmark Kochi had begun its journey at Rs.67.23/Kg & touched the high of Rs. 139.19 within a year.

Strong appreciation in prices in all major global markets which touched Rs 130.48 per kg, made the domestic market bullish.

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Similarly, the futures at MCX posted a gain of 78.94% as of 22nd December, 2009.

This spike was also supported by the increased gap between production & supply.

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Next Blog we would read about the impact of the shortage of rubber industry on major industries and the scenario of the rubber production in other countries.

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Stay Tuned for more on this.

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