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Thursday, 30 August 2012

Volatile Rubber Price! How to take good market opportunity: Part-I



LATEX PROCESSING
Latex processing

DRYING RUBBER SHEETS
Drying of Rubber Sheet
        






     “When I’m ready, situation is not. I’m in the loss due to low of rubber prices. Price of dried rubber sheet is very low, I’m worried”.
 General scenario    
         What is the general opinion? Price of Rubber (dried sheet) is declining from the month of April and it has come to the lowest in the current month (August). The ongoing price or rate fluctuation is making the Rubber growers worried.
         Many worried growers are stocking the dried rubber sheets for the time being to sale their products in the month of October or November or during the month of Puja anticipating the appreciation of rubber price.
STORED DRIED RUBBER SHEETS            It is also heard as saying that some growers have stopped tapping for rubber latex temporarily to escape this particular period time and also to escape loss during this market glut of rubber. Many growers are expressing concern about the market appreciation of rubber in future. This is especially concerning to the individual growers and retail sellers who otherwise make independent decision for sale of product.

           Let us see the sample data on the price of dried Rubber sheet in Tripura and how it actually slides over a period of time.

Price/rate of per kilogram  dried rubber sheets during the period from April to August
Districts
Sample data
April
May
June
July
August
Average price
South
Sample - 1
180.00
175.00
170.00
165.00
150.00
168.00
Sample – 2
170.00
160.00
155.00
145.00
135.00
153.00
Sample – 3
160.00
160.00
145.00
140.00
135.00
148.00
Sample - 4
182.00
175.00
160.00
155.00
145.00
163.40
Gomati
Sample – 1
190.00
180.00
180.00
160.00
140.00
170.00
Sample – 2
185.00
187.00
193.00
195.00
170.00
186.00
Sample – 3
185.00
183.00
178.00
168.00
-
178.50
Sample – 4
190.00
185.00
180.00
170.00
150.00
175.00
Sepahijala
Sample – 1
170.00
160.00
160.00
155.00
130.00
155.00
Sample – 2
170.00
160.00
155.00
135.00
140.00
152.00
Sample – 3
175.00
170.00
160.00
150.00
143.00
159.60
Sample – 4
190.00
185.00
178.00
175.00
161.00
177.80
North
Sample – 1
182.00
180.00
180.00
170.00
-
178.00
Sample - 2
182.00
180.00
180.00
170.00
-
178.00
Unakoti
Sample -1
160.00
160.00
160.00
170.00
-
162.50
Sample -2
140.00
140.00
200.00
200.00
-
170.00
West
Sample -1
200.00
192.00
192.00
190.00
-
193.50
Sample -2
180.00
180.00
192.00
194.00
-
186.50
    
Period of price decline
       The above table shows that rate/ price of rubber actually declined from the month of May and June onwards, and it did not regain momentum till date. However, apparently the lowest price of dried rubber sheet is observed in the month of August.
 Regional disparity of price
       However, the table also indicates the other disparity too. There’s observation in regional disparity of rubber price and more, astonishingly, price variation is even observed within same region too.
 Continued good price
       It is also strikingly visible that in some places and districts, there’s less fluctuation of rubber price compare to the other regions of the state. In the West and Gomati regions, price of rubber during the period from April to August was almost stable with minor fluctuation and monthly variation. The four month average price of dried rubber sheet of West district is the highest ranging from rupees 193.50 to 186.50. This is followed by the five month average price of rubber (dried rubber sheet per kilogram) which is almost in the range of rupees 170.00, 186.00 and 178.00 in three places of Gomati district respectively.
       Similarly, in the North district too price of dried rubber sheet remain stable within the four months’ period from April to July.
       However, the most visible price fluctuation and variation within the states is in some parts of South and Sepahijala districts. In South district, the lowest decline of price in two places is in the range of rupees 153.00 and 148.00 per kilogram of dried rubber sheet respectively.
       In Sepahijala district, prices in two places are also similar to that of south district. The five moths’ average price is in the range of rupees 155.00 and 152.00 per kilogram of dried rubber sheets respectively.
 Reason for decline of rubber price
       Price factor is said to be influenced by the all India market index however, price fluctuation in the local level is said to be influenced by the following factors:-

       1. Retail sale subjects to low price realization

       2. Wholesale of dried rubber sheets drives more price realization.

 1. Retail sale subjects to low price realization

       In rural areas more specifically in rubber growing belts, growers sell his produces in retail to the local market dealers. It is fact that this is one of the reason; growers are many times subjected to the low price compare to the prevailing price of rubber in the up market condition.
       In the village areas, there’s also tendency that many local dealers visits to the growers and motivate or influence the growers to sell his or her produces to the dealer but price is again comparatively low compare to the prevailing market price. This is even lower within the rural market too when the product is purchased on spot.
       There’s also another tendency that has been observed in the rural areas wherein the local dealers come to the agreement with the growers for sell of his produce that particular dealer. Here, the dealer, in return to the agreement is lending one time hefty sum which is adjusted later on through sale of products. In the instant case also such growers are subjected low price realization.
2. Wholesale of dried rubber sheets drives more price realization.
      Another observation some intelligent growers do is; they stock the dried rubber sheet for sufficient quantities and wait for good market price to sale their product. In this case, such growers can negotiate even with the local dealer too for better price compare to the existing the price in the local area.
      However, what many growers and registered members of RPS (Rubber Producer Society) indicate is; they sale their product through RPS for better market price. Here, what the RPS does is; they sale the dried rubber sheet to the organization like Manimala and also other big wholesale dealer of rubber with better price  offered by such organization or dealers which is almost in conformity with the national rubber price index.
      Another aspect, growers and many registered RPS members and RPS authorities opines is; for better and uniform market price realization, Manimala is the best as it offers the price which is  in conformity with the price prevalent in the national price at such particular time when the product is purchased from the source like different RPS or their registered members.
      What to Conclude?
      What is observed from the general observation and data’s (limited data) is; rubber price of course declined in some places but declination is not similar in all regions with some exception to the places. This clearly indicates that the growers should be extra cautious in choosing the vendor or dealer for sale of their produce or products.
      What is advisable is; for better price realization, growers should cross check local market price with the national price index of the rubber which is available in the daily basis that could easily be accessed either directly from the internet or though their Regional Rubber Board or their functionaries and also through the RPS.
     In the part-II, we will see how RPS and growers sells the product and how good market realization is achieved.
          However, suggest your expert opinion in the comment box.