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Despite the crises in Libya and Japan, tea and rubber prices had remained strong in the first quarter of this year with tea from all three elevations recording year-to-date price increases with the net sale average up to Rs.394 per kg from Rs.383 a year earlier, Johh Keells Stockbrokers said in a plantation sector update.
However, the report noted that tea prices had been "greatly supported" by production declines due to adverse weather with the latest figures indicating that the February crop was down 9.3 million kg from a year earlier.
In other producer countries, the Kenyan crop was down 9.8 million up to February 11, a decline of 13.5%, while India had a deficit of 6.2 million kg in January 2011.
Rubber prices has remained buoyant with RSS 1 averaging Rs.591 per kg in the first quarter of this year, up 71% from a year earlier, while latex crepe at an average of Rs.623 per kg was up 79% from the comparative period the previous year.
However, rubber prices had taken a beating in March following the earthquake and tsunami disaster in Japan with concerns about the closure of manufacturing plants there. But prices had subsequently recovered, the brokers said.
They noted that commodity prices had benefited by the increases in crude oil prices on the back of the crises in Libya with rising crude oil prices driving up the price of synthetic rubber indicating a positive increase in the demand for natural rubber.
Brokers said that China, the world’s largest consumer of natural rubber, had remained on the sidelines of the market due to soaring prices but was expected to return soon as its natural rubber inventories depleted.
"On the supply side, floods in Thailand, the world’s largest natural rubber producer had disrupted output with production expected to drop by 50,000 tons according to the Thai Rubber Association," John Keells said noting that seasonal winter is also likely to dampen supply in the coming months which should further support prices.
Regional plantation companies had posted cumulative profit of nearly Rs.1.57 billion in the December quarter with Kotagala and Kegalle with many rubber estates in their portfolios being the biggest beneficiaries.
The sharp increases in prices more than compensated for reduced production due to adverse weather conditions, John Keells said.
Other plantations that had done well, thanks to the rubber estates in their portfolios, included Horana, Malwatte Valley and Namunukula. This was in addition to Kegalle and Kotagala.
the sunday island.lk
However, the report noted that tea prices had been "greatly supported" by production declines due to adverse weather with the latest figures indicating that the February crop was down 9.3 million kg from a year earlier.
In other producer countries, the Kenyan crop was down 9.8 million up to February 11, a decline of 13.5%, while India had a deficit of 6.2 million kg in January 2011.
Rubber prices has remained buoyant with RSS 1 averaging Rs.591 per kg in the first quarter of this year, up 71% from a year earlier, while latex crepe at an average of Rs.623 per kg was up 79% from the comparative period the previous year.
However, rubber prices had taken a beating in March following the earthquake and tsunami disaster in Japan with concerns about the closure of manufacturing plants there. But prices had subsequently recovered, the brokers said.
They noted that commodity prices had benefited by the increases in crude oil prices on the back of the crises in Libya with rising crude oil prices driving up the price of synthetic rubber indicating a positive increase in the demand for natural rubber.
Brokers said that China, the world’s largest consumer of natural rubber, had remained on the sidelines of the market due to soaring prices but was expected to return soon as its natural rubber inventories depleted.
"On the supply side, floods in Thailand, the world’s largest natural rubber producer had disrupted output with production expected to drop by 50,000 tons according to the Thai Rubber Association," John Keells said noting that seasonal winter is also likely to dampen supply in the coming months which should further support prices.
Regional plantation companies had posted cumulative profit of nearly Rs.1.57 billion in the December quarter with Kotagala and Kegalle with many rubber estates in their portfolios being the biggest beneficiaries.
The sharp increases in prices more than compensated for reduced production due to adverse weather conditions, John Keells said.
Other plantations that had done well, thanks to the rubber estates in their portfolios, included Horana, Malwatte Valley and Namunukula. This was in addition to Kegalle and Kotagala.
the sunday island.lk
