Spot rubber prices were not available on Monday as the local trading houses remained closed due to the total lockdown implemented by the Government of Kerala to check the spread of the second wave of Covid-19 cases in the state.
According to the Association of Natural Rubber Producing Countries (ANRPC), natural rubber (NR) prices has the potential to improve in the short term, at least marginally, driven by the improved outlook on the demand and supply constraints. However, the second wave of Covid-19 infections in India along with the slow progress of the vaccination drive can put a cap on the demand growth as well as the recovery process.
The world supply during May 2021 amid the second wave is likely to remain low by matching with the average monthly supply during the three months from February to April 2021. However, the world supply is expected to improve in June 2021. Compared to May 2021, the production during June 2021 is expected to be 15.8% higher.
In the futures, the front-month May delivery was up 1.13% from Friday’s settlement price to close at Rs 173.74 per kg with a volume of 27 lots on the Multi-Commodity Exchange (MCX). According to analysts, the commodity is poised to test higher levels propelled by tight supplies, and sustained demand from industries such as automobile and healthcare.
SMR 20 weakened to Rs 129.53 (130.28) while Latex improved to Rs 118.09 (117.58) per kg at Kualalumpur.
But despite the second wave, the most active natural rubber contract for September delivery was up 75 Yuan (Rs 857.94) from the previous day’s settlement price to close at 14,545 Yuan (Rs 166,383.62) a tonne in day time trading on Shanghai Futures Exchange (ShFE).
As a large part of the country continues to remain under strict curbs due to the raging pandemic, several states and union territories including Delhi, Haryana and Uttar Pradesh extended till 17 May their ongoing lockdown. Tamil Nadu, Puducherry and Rajasthan will also have a two-week shutdown starting 10 May while in Karnataka stringent restrictions will come into effect till 24 May. On Saturday, Kerala came under a nine-day complete lockdown.