The National Multi Commodity Exchange of India Ltd has said that domestic rubber futures are moving in tandem with the international market. This is because global markets are facing pressure from excess supply and dropping demand, particularly from China.
Anil Mishra, Managing Director of NMCE, said that duty free imports of rubber under the advance licence scheme by rubber products manufacturing companies may continue to put pressure on domestic prices till the end of the current financial year. The hike in import duty will not have any adverse impact on imports immediately; but only later.
Since the consuming industries are holding a comfortable inventory, mainly due to imports, demand in the domestic market may remain sluggish in coming months, he said.
Deliveries in the NMCE designated warehouses have been rising continuously in all the seven Central Warehousing Corporation depots located at Ernakulam, Aluva, Kakkanad, Kakkanchery, Kankijikode, Kozhikode and Thrissur (all in Kerala).
Warehouse stocks of rubber have increased by 3,379 tonnes in December.
He said that the futures market has been getting support from participants wanting to hedge their purchases in the physical market, by taking short positions and delivering at the exchange designated warehouses.