Representational image:(Photo: Sivaprasad/ Mathrubhumi.com)
Alappuzha: Russian invasion in Ukraine is likely to put rubber prices on a roller-coaster ride. In the wake of war, there will be a temporary skyrocketing of prices. However, after the war it may give counter productive effect as it impacts trade, commerce and business.
Due to war, the price of unprocessed oil is rising and this inturn increases rubber prices. The rate of brent crude oil has risen from Rs 15-Rs 20 per barrel range to Rs 100 and above. Now it is trading at Rs 102 per barrel and there is speculation that it will reach Rs 115 a barrel. Synthetic rubber which uses crude oil as raw material will indirectly increase in price. This in turn will increase the demand for natural rubber.
The usual trend is that during wars, demand for rubber in tyre and tyre allied sectors will increase. The rubber prices will skyrocket. However, post-war inflation may emerge, says market experts. Contingency in the economy will affect all sectors including the market for tyres.
Russia and Ukraine are some big takers of rubber-based products. During war there will be huge demand for items like gloves. But as war ends the demand will plunge and cause inflation. The impact is almost unpredictable, experts pointed out.
Domestic price of 1 kg rubber is up to Rs 165. The prices came down after breaching Rs 190/kg mark. Usually the season ends by mid-February. However, this year the good rates continued than usual and many are still tapping rubber.
The rubber cultivators in Kerala had a favourable season due to cold climate in the morning and especially in central Kerala region, rains between was beneficial. Due to this there is availability of rubber. The cultivators are expecting more yields when compared to the corresponding period of the previous year.
Last February rubber imports were around 35,000 tonnes. Primary estimates suggest the imports will increase by at least 10 percent.