Commodity Prices(Rubber)

Market prices

The higher price in the international market is reflected in the domestic market also. The average price of RSS4 in the domestic market at Kottayam was Rs. 55.70 per kg. in 2004-05 which increased to Rs. 66.99 in 2005-06. The international price of RSS3, equivalent of RSS4 of India, increased from Rs. 57.51 to Rs. 73.98 in the corresponding period. The price of RSS 4 in Kottayam reached Rs.106.92 during June 2006 and then declined to Rs.87.09 in October 2006. The Indian price (RSS4) which was higher than the international price till June 2006 started moving below the international price during the remaining months of the year owing to the sharp increase in the international price.

World rubber prices may continue to show some strength in the near future largely due to the high oil price and continuing global economic growth. If global economic growth, especially in developed countries such as the EU, Japan and the United States and large developing countries such as China and India continues at the current pace, further price strengthening could be expected. It would, however, be limited in the long run by the good potential to increase supply by more intensive tapping and by increasing yield in the major producing countries. (Economic review 2006)

The average farm price of rubber during the year 2001 to 2006

Source: Economic Review 2006