Economy & Market

Favourable tapping conditions improve Jan. rubber production

The local rubber production witnessed an improvement in January, due to the weather remaining somewhat favourable for tapping operations.However, a drop in prices was evident at the Colombo rubber auction, Forbes and Walker Commodity Brokers said in its monthly rubber market report.The drop in prices at the auction was attributed to the relatively soft demand, due to the looming geopolitical tension, long holiday season in Europe and 18 percent Value Added Tax levied on sales.The flat market conditions prevailed for crepe rubber whilst the demand for top grade LCR. 1X remained firm. During the month, the prices of the Latex Crepe 1s eased off, which settled at Rs.800, the No. 2s slid from Rs.750 to Rs.650 and the 3s eased off from Rs.695 to Rs.610, whereas the No.4s were sold between Rs.575 and Rs.660.

The Scrap Crepe 1X Browns traded at Rs.550 to Rs.580, the 2X Browns eased off from Rs.525 to Rs.515 during the period and the 3X Browns were trading at Rs.500 to Rs.520.The price of RSS came down. RSS 1 traded at Rs.650 by the end of January 2024. Sri Lanka’s national production of natural rubber during the year 2023 was recorded at 65,000 MT.Meanwhile, the global rubber futures concluded the first week of January with a slight downturn across most major exchanges. The futures remained mixed across major rubber exchanges during the second week and in the third week recorded gains across all major exchanges, primarily driven by strong physical demand ahead of the upcoming Chinese New Year holidays.

All rubber exchanges reported a higher trading volume with higher prices, signalling fresh buying interest and positive market sentiment. The futures markets ended the fourth week with mixed results and closed the month of January with declines, driven by concerns about sustained deflation in China and weak economic data. The market saw both fresh selling and position adjustments ahead of the Chinese New Year holidays.

( Source : Daily Mirror)