Natural Rubber Prices Surge to Record ₹290/kg Amidst Soaring Demand and Limited Supply

Natural rubber prices in the domestic market have surged to a historic high of ₹290 per kg for RSS-IV grade, fueled by strong demand from consuming industries alongside tight supplies. This has positioned Indian prices above international benchmarks, with domestic prices outpacing those in Bangkok, where they stand at around ₹270 per kg. Block rubber in India is selling at ₹273 per kg compared to the international price of ₹245. The increase is largely attributed to heightened demand from tyre manufacturers, with local prices currently ruling ₹20 higher than their international counterparts.

The ongoing increase in prices can be linked to several global and local factors: robust demand from the auto sector continues to exceed supply, while imports have averaged around 75,000 tonnes per month. Furthermore, a shift in growers’ focus towards higher-priced alternatives like latex and cup lump is contributing to a supply shortage of sheet rubber. According to industry experts, the instability caused by geopolitical tensions—particularly in West Asia—has escalated Brent crude prices, indirectly driving up synthetic rubber production costs and prompting manufacturers to pivot towards natural rubber. Additionally, adverse weather conditions have negatively impacted latex output in southern regions, further tightening the domestic supply chain.

In the short term, traders and investors should brace for continued pricing volatility, with natural rubber likely to hover around the ₹300 mark. While improved rainfall from the northeast monsoon is expected to support production in the upcoming months, the ongoing supply limitations could counterbalance this relief. Moreover, international demand dynamics may slow down potential gains, especially as Chinese buyers are exhibiting caution following recent price increases. As such, strategic positioning may be crucial for those looking to navigate the current market landscape effectively.

Source: Market Source

(Expert Note: This report was independently prepared by the Wealthova Commodities team.)