Natural Rubber Prices Reach Record High of ₹290 Per Kg Amid Supply Constraints and Strong Demand

Natural rubber prices in the domestic market have touched a historic high of ₹290 per kg for RSS-IV grade. The price increase is driven by strong demand from consuming industries alongside tight supplies, pushing Indian prices above international levels.

Traders attributed the surge to robust demand from tyre manufacturers. Domestic natural rubber prices are currently ruling ₹20 per kg higher than international prices, with rates in Bangkok standing at around ₹270 per kg. Additionally, block rubber prices in India reached ₹273 per kg, compared with the international price of ₹245.

George Valy, president of the Indian Rubber Dealers Federation, stated that natural rubber availability had not improved to the expected extent despite regular tapping. Imports of natural rubber and compound rubber have remained high, averaging around 75,000 tonnes a month.

The prevailing prices of latex and cup lump, at ₹300 and ₹200 per kg respectively, have encouraged growers to shift from sheet rubber production to these alternatives to capitalise on better price realisations. This shift has contributed to the ongoing shortage of sheet rubber in the market.

Meanwhile, growers remain hopeful of improved yields in the coming months as the northeast monsoon brings rain to major rubber-growing regions. This rainfall is expected to support production and improve market availability.

Harish MV, Director at Harnez Fin Analysis, noted that the current surge in prices is largely attributed to the West Asian conflict. Heightened Brent crude prices, driven by geopolitical tensions, have increased production costs for synthetic rubber. This dynamic has prompted manufacturers to shift towards natural rubber.

In India, unusually hot weather previously cut latex output in southern growing areas, while auto sector demand exceeded local supply and supported imports. Chinese buyers became more cautious after the August price rise, which limited further gains. Natural rubber prices are likely to stay firm around the ₹300 level in the near future as weather risks continue in producing regions, though rising seasonal supply and weak demand outside Asia may limit further gains.

"The recent surge in natural rubber prices highlights the direct impact of supply-side constraints and geopolitical tensions on raw material costs for downstream sectors like manufacturing and automotive. When domestic prices exceed international benchmarks due to regional weather patterns and shifts in grower focus, consuming industries face margin pressures. For businesses reliant on raw commodities, supply chain diversification and proactive hedging strategies become critical to navigate such volatile market environments." — Dr. Shishir Gupta, Founder & CEO, StartupLanes