Kochi had no sellers for Garbled Pepper at 432/kg on spot despite buyers

Last Updated : 02 October 2012 at 10:55 IST

KOCHI (Commodity Online): Kochi witnessed sales to the tune of 30 tons of ungarbled pepper at the rate of Rs.411/kg on Monday. There were buyers for garbled variety at the rate of 432/kg, but no sellers.

As per reports, arrivals from the primary markets have been robust. Brazilian production may get delayed this time around.

Pepper October contract on the NCDEX has been trading in a range without much of volume in last few trading sessions. Technically it is having an immediate support and resistance at 43100 and 43800 respectively. Increased arrivals in spot market may take the commodity to the southern direction in coming sessions. Break out of the level of 43100 can be considered as a good entry level on the selling side.

Cardamom

Cardamom prices have risen by Rs 50 to Rs 100 per kg to Rs 750 per kg as auctions at Bodinayakannur and Vandanmedu have remained suspended since September 24. The growers and even some Spices Board officials are keen to stop the auction process given various factors.

“There is stiff lobbying amongst people who participate in auctions and they do not allow prices to go beyond a point.” said a market player.

Meanwhile, dry weather conditions have impacted cardamom plantations in Idukki. Growers expect a drop of 40% in production this season against a normal production of 12,000 to 13,000 tons annually. If auction remains suspended prices are likely to rise further, sources said.

Prices to hit the roof if climate hostile, Guatemala output low

If the climate continues to maintain a tough patch, it is highly likely that cardamom prices would hit the roof. But it all depends on the Guatemala cardamom production. If Guatemala cardamom production too is low, then one will not have enough of cardamom to sell in the markets, meaning prices would skyrocket, sources said.

Newspaper reports indicate cardamom plantations in Guatemala have not recovered from the damages that have been suffered.

Now, with festive demand in the offing and export demand pending it can be safely assumed that India cardamom does hold a bright future.

Currently the carryover stocks and rupee appreciation is keeping cardamom tethered to a bearish trend.

Cardamom has been maintaining positive sentiment in recent days as export demand is expected in the ensuing weeks, ahead of coming festivities. Cardamom October contract is having a good support at 960. So buying around 985 with stop loss of 960 is a good trading strategy for coming session.

Immediate outlook however is bearish.

Natural Rubber

Natural Rubber has seen trading at the rate of Rs.195/kg in the Kottayam markets. MRF Tyres has been an active buyer except for the last week. “Their stocks have been low and although there are no exports occurring given the relatively weak rupee, imports are happening.” The farmers are also not keen to come out with stocks, a trader said. The world market is a buyer's market now and Thailand has come up with cap on exports to arrest drop in prices.

The overall market trend is bullish. Natural rubber on the TOCOM in Japan also witnessed an uptrend with gains to the tune of 5 Yen yesterday.

Natural rubber is having good support levels at 19100 and 18700 and an immediate resistance at 19600. It may start recovery from the levels near 19100 as the overall trend for medium term remains positive. Outlook is bullish.

As published in: http://www.commodityonline.com/news/kochi-had-no-sellers-for-garbled-pepper-at-432kg-on-spot-despite-buyers-50642-3-50643.html

Solving the data puzzle on India natural rubber fundamentals

Is the Indian Rubber market facing acute shortage of natural rubber?

Is there any problem with the statistical methods that India Rubber Board employs to calculate stocks?

As per the latest figures available with India's Rubber Board, June-end surplus stocks—or stocks that are available for July with traders—stands at 190312 metric tons.

Meanwhile, the anticipated production figures for August and September are pegged at 71200 tons and 80200 tons respectively. Consumption for the same months are estimated to be 77000 tons and 74000 tons.

The table tells that the excess requirement for the month of August and September stands at 5800 tons and 6200 tons respectively. Imports—block rubber and sheet rubber—for the months stand at 17605 tons and 9100 tons. While the scenario of excess demand fades in August due to aggressive imports at 17605 tons, excess demand for September is expected to be at 2900 tons.

Now, as slowdown takes over the global economy, sluggishness is visible with consumption of rubber in offtakes down to 74000 tons for the month of September.

Though data to this end is yet to be made available, one can safely assume that with July surplus at 190312 tons, coupled with global slowdown denting demand, the requirement would be lethargic.

Result: Surplus Rubber in the country

(Quantity in tons)



Addressing the second question: it is often held by industry bodies like ATMA(Automotive Tyre Manufacturers Association) and AIRIA(All India Rubber Industries Association) that rubber board is making a serious statistical error in calculating the stocks in country; that board is taking into account even the already sold stock which is the inventory of various manufacturing companies.

But, as long as natural rubber is kept as it is, as long as natural rubber is not converted to end-product, the board has no other options; but to follow the current methodology in tabulating stocks.

And the Board is providing stock figures in a segregated form in its statistical news bulletin published every month which is available online.

So, the conclusion that Board's 'erroneous' figures may affect policy prescriptions holds no water.

As published in: http://www.commodityonline.com/news/Solving-the-data-puzzle-on-India-natural-rubber-fundamentals-43105-3-1.html

Rubber: Indian branding efforts set to conquer markets

Back in February, in a major branding exercise, India’s Rubber Board had unveiled a quality certification logo for natural rubber that was expected to increase the acceptability of ‘Indian Natural Rubber’ in the world market.

Now, with 3000 tonnes of branded natural rubber-- Indian Natural Rubber-- being exported since February (that forms 35 per cent of the total rubber exported during February - August period this year); Malaysia and China, world's largest consumers of natural rubber, are interested in importing from India.

“India may only be the fourth largest producer of natural rubber. But, unlike India, the top three producers have not opted branding of natural rubber” said Binoy Kurien, Deputy Director, Marketing, India Rubber Board.

No doubt, this initiative of Rubber Board has given the country a lethal edge in international markets!

Indian Natural Rubber
Across agri-commodities, natural rubber (NR) is the one that finds industrial use like no other. Being a listless piece of enormous flexibility carrying a pungent smell, natural rubber has to ultimately find its abode in one or the other of industrial products. And since natural rubber goes to the industry, if it has a tag of identity to it, chances are better that it would find acceptance among industry players.

While this could be a philosophical approach there are reasons why it makes sense to brand natural rubber from India with logo and certification:

--Value creation across the natural rubber value chain

--An endorsement from the mandatory body that regulates the activities in natural rubber production in a nation that is the fourth largest producer of the same.

--An identity for rubber produced by countless faces toiling in plantations in rain and shine

--Instilling confidence in international buyers

--Providing stake holders with premium rates and helping farmers with lucrative prices

“All natural rubber exporters who are having valid Registration Cum Membership Certificate to export rubber from India can register with the Board for using the brand “Indian Natural Rubber”. The exporter shall pay a registration fee of Rs. 1000/- (one time) for using Indian Natural Rubber Logo on their products viz., RSS, ISNR and latex grades.” says the information from http://www.indiannaturalrubber.com

Apart from this, exporter will have to execute a MoU with the Board on the terms of logo usage. This will cover all the technical aspects, an export shall have to bear, while using the brand. Besides this Board will levy a logo usage fee for each kilogram of natural Rubber exported using logo.

The exporter has to grade, sort and pack the rubber as per Green Book/BIS specifications and seal individual packs with logo sticker and to inform “Export Ready status “for inspection.

Rubber Board will arrange inspection and draw samples for quality testing.

However, the usage of INR logo exporters is purely voluntary.

The Rubber Board is planning to introduce Indian Natural Rubber with fan fare in trade fairs and other gatherings starting 12th five year plan.

So who are the buyers of branded natural rubber?

“All who cares to buy!”, snapped Binoy.

Encouraging response from rubber manufacturers
The domestic manufacturers of rubber have shown encouraging response to branding initiatives floated by Rubber Board.

“There are about 50-55 active exporters for natural rubber in India. Amongst them, 35 exporters have opted for brand registration.” Binoy said.

“The encouraging fact is that those who export branded natural rubber are receiving repeat orders in the same category. This is because, the brand in itself is a quality assurance and where the negotiations were otherwise used to be focused on factors other than price (like quality), branding has changed the scenario by providing assured leg room when it comes to quality.” he added.

“There is virtually no risk: 99% risk has been contained by branding assurance.” Binoy elaborated.

What if players like Indonesia and Malaysia too come up with their own brands?

“We are having a forerunner advantage. Assured quality that comes through branding has cleared the stigma previously attached with Indian rubber. Also, other nations do not base them out of an organized playing ground. Unlike India, they lack a coordinated approach when it comes to natural rubber.” He said. “Their efforts are more or less individualistic and scattered”, he added.

Indian Natural Rubber can be touted as an umbrella brand, under which many private brands could flourish, Binoy continued.

“There are certain private players having their own brands in natural rubber. But, ‘Indian Natural Rubber’ can act as an Umbrella Brand and accommodate all these players under it.”

As published in: http://www.commodityonline.com/news/Rubber-Indian-branding-efforts-set-to-conquer-markets-42417-3-1.html