Natural rubber prices hit record high of ₹290 per kg on strong demand, tight supplies

The domestic price for RSS-IV grade natural rubber in India has soared to a record high of ₹290 per kilogram, fueled by robust demand from industries and limited supplies. This surge pushes Indian prices above international levels, with traders noting that domestic rubber prices are ₹20 per kilogram higher than global rates. Block rubber prices in India reached ₹273 per kilogram, while the international price stands at ₹245 per kilogram.

George Valy, president of the Indian Rubber Dealers Federation, explained that even with regular tapping, rubber availability hasn't improved as expected. Both imports of natural and compound rubber have remained high, averaging 75,000 tonnes per month. Growing conditions have also contributed to the shortage, as growers shift from sheet rubber production to latex and cup lump alternatives due to better price realizations.

Latex at ₹300 per kilogram and cup lump at ₹200 per kilogram have attracted growers to these options. Valy is optimistic about future yields due to the northeast monsoon rains, which are expected to boost production and availability. Harish MV, Director of Harnez Fin Analysis, attributes the price surge to the West Asian conflict, which has increased production costs for synthetic rubber, prompting manufacturers to opt for natural rubber instead.

Unusually hot weather has also affected latex output in southern growing regions, while auto sector demand has outpaced local supply, supporting imports. Chinese buyers have become more cautious following the August price increase, which has limited further gains. Natural rubber prices are expected to remain firm around 300 level in the near future as weather risks persist in producing regions, although rising seasonal supply and weak demand outside Asia may curb further gains.