Dip in rubber prices amid lower demand from local shippers and foreign buyers

The local rubber sector has witnessed decline in auction prices for the month of August, despite a contraction in the overall output, amid weak demand from local shippers and foreign buyers.  
Forbes and Walker Commodity Brokers Director Damitha Perera attributed the low demand to sentiments on global recession and the dull commodity market conditions across the world.

The rubber auction saw prices of Latex Crepe 1X and 1 ease off gradually by approximately Rs.125 per kilo and settled at Rs. 875 towards the latter of August. No. 2 slid from Rs. 900 per kilo to Rs.800 per kilo.
Prices of No. 3 declined sharply during the first half of the month, but slightly improved during the latter part, settling at around Rs. 640 per kilo. No.4 settled at around RS. 510 per kilo and RSS No.1s traded at around Rs.670-Rs.700 per kilo during the month of August.

 Perera highlighted that natural rubber traded below US$ 1.5 per kilogram throughout the month of August, a level not seen since last December due to prevailing concerns over the global recession triggered by an aggressive tightening from major central banks to rein on inflation.
Japanese rubber futures fell across the month of August, weighed down by weaker crude prices and concerns over heavy supply. 

 Prices of natural rubber in the key markets of Kerala fell thorough-out the month with the expectation of a rise in supply in the domestic market along with weak demand from bulk buyers. 
Higher stock levels were reported in Thailand and Vietnam and the rubber was available at discounted rates in the regional markets as the price of synthetic rubber came down during the period due to the weakening crude oil prices.