Rubber Prices at 3 Year High, Tyre Makers Feeling The Pinch

By Anshul Srivastava
Updated: Dec 19th, 2019 at 1:56 pm

The price of natural rubber (NR) is at a three-year high Rs. 158 for RSS-IV grade in the Kerala spot markets. Since January, 2014 this is the highest rate of NR. According to the dealers, the chief reason for the continuous rise in prices of natural rubber is the decrease in the production in major NR producing countries like Thailand.

The cost of the tyre includes 40% the cost incurred on the natural rubber for making it. Therefore, the rise in this raw material is going to affect the profitability of tyre making companies. Another issue is the fact that farmers are not selling rubber at present levels they are waiting for the further rise in the price of NR.

Due to this reason, the shares of major tyre makers – CEAT, Apollo, JK Tyres and MRF Tyres have encountered a slight dip in the market. The situation is not going to ease any sooner as the major rubber producing countries are facing floods that have affected the crops.