MUMBAI, March 16 (Reuters) - Indian rubber prices in spot and futures market hit record highs on Tuesday, buoyed by robust demand amid a drop in the production, analysts said.
The benchmark April contract NMRUJ0 on the National Multi-Commodity Exchange (NMCE) hit a record high of 15,390 rupees per 100 kg, the highest level for near-month contract since futures trade was introduced in 2003.
The spot price of the most traded RSS-4 (ribbed smoked sheet) rubber hit a record high of 14,900 rupees in Kottayam, Kerala, as per data compiled by the Rubber Board.
"The supply situation is very tight. We have entered into the lean season and supplies will fall further in coming weeks," said Shiji Abraham, analyst with JRG Wealth Management.
Usually rubber tapping slows down in summer season in India.
In 2009/10, output in the world's fourth biggest producer is expected to drop 4 percent to 830,000 tonnes from 864,500 tonnes a year ago. See [ID:nSGE6240E6]
India's top tyre firms are reluctantly holding prices, risking a hit on profit margins, despite a recent surge in input costs as they wait for prices of natural rubber to stabilise from a current record high. See [ID:nSGE6270GS]
Tyre makers consume about 60 percent of total rubber output.
Between April 2009 and January 2010, vehicle sales in India climbed 24 percent to nearly 10 million units, on a low base, helped by tax cuts and softening loan rates.
(in.reuters.com)
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