Rubber prices in India that have been remaining stable since the beginning of this year has suddenly surged by about 5% from the first week of August following disruption in rubber production caused by recent rains and floods in the state.
The price of RSS4 in the domestic market which stood at Rs132 a kg on August 1, 2018, rose to Rs134.50 on August 28.
The disruption in production is likely to continue for some time in view of extensive damage ro rubber plantations caused by floods.
Tyre companies such as MRF Ltd and Apollo have experienced substantial production losses at their plants in Kerala due to floods.
If the shortfall in local production continues, tyre companies will be forced to resort to more imports to meet their requirements. In spite of a weaker rupee, the landed cost of imported rubber is at present less than domestic rubber. While Rss4 commanded a price of $191.70 (Rs13,450) per 100 kg in the Indian market on August 28, the international price for RSS3 was $150.70 and RSS4 $149.80.