MUMBAI, March 20 (Reuters) - Natural rubber prices in India are likely to extend gains this week on an improvement in demand from tyre makers and as tapping has slowed down, dealers said.
The benchmark April rubber on India’s National Multi-Commodity Exchange (NMCE) provisionally closed up 0.2 percent at 20,020 rupees per 100 kg on Tuesday.
The price of the most-traded RSS-4 rubber (ribbed, smoked sheet) in the Kottayam market in Kerala rose 100 rupees to 19,600 rupees per 100 kg.
“Tapping has slowed down. For next few weeks, it will remain subdued,” said N. Radhakrishnan, a dealer and former president of Cochin Rubber Merchants Association.
Rubber production in India peaks during October-January and starts falling from February.
“Lower stocks estimate by Rubber Board is also supporting sentiments,” he said.
The state-run Rubber Board earlier this month said at the end of February, stocks in the country stood at 244,000 tonnes against 315,339 tonnes during the same time last year.
“Tyre makers imported large quantity in the past few months as rubber was cheaper in international market. But now local prices are lower than international market. Tyre makers will rely on local market,” Radhakrishnan said.
India’s natural rubber imports in February jumped 171 percent from a year ago, the state-run Rubber Board said, although a recent rebound in the overseas prices is expected to push domestic tyre makers to start buying more locally from March.
India, the world’s fourth-biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam. (Reporting by Rajendra Jadhav; Editing by Rajesh Pandathil)