Rubber prices stay low despite global supply drop, slow Chinese demand weighs heavily

Kottayam: Despite a global decline in rubber production due to heavy rains, rubber prices remain low, defying market expectations. Typically, a drop in supply leads to a surge in prices, but this trend is not being reflected in the current market.

In Kottayam, the trading price for rubber remains at ₹190 per kg. The Rubber Board has fixed the price of RSS-4 at ₹198. In comparison, international prices in Bangkok are slightly higher: ₹200.75 for RSS-3 and ₹199.95 for RSS-4. However, crossing the ₹200 mark remains a challenge.

One of the key factors limiting a price increase is the cautious purchasing approach by Chinese buyers, who usually account for around 40% of global rubber imports. China’s industrial activity has not fully recovered, dampening demand. Additionally, uncertainty over US tariff policies is making international buyers hesitant.

The ongoing conflict in West Asia has further disrupted global trade flows, adding to the uncertainty. Even with reduced supply, speculative traders are showing limited interest in making bulk purchases.

Reports from Indonesia and Thailand indicate a 6–10% drop in production due to continuous rainfall. Kerala has also seen a decline in output, and scattered showers have done little to improve the situation.

Babu Joseph, General Secretary of the National Consortium of Rubber Producers’ Societies (NCRPS), stated that prices could rise above ₹220 per kg if the supply shortage continues and geopolitical tensions ease.