Rubber price slip to 1-year low; here's why

China accounts for 40 percent of the global natural rubber consumption and the country is not restocking, and that continues to weigh on to the markets as well. Apart from that, looking at the Indian markets, rubber prices declined here as well. It was trading at 8-year highs in August. Since then, it has been constant profit-taking as the demand has been on the weaker side and the rubber supplies or the arrivals into the markets have been increasing and we are now getting into the peak production season. So there is an expectation that the rubber supplies will increase going forward and that seems to be weighing in as well.

The Association of Natural Rubber Producer Countries expects the production and consumption for the global markets to increase this time around with consumption up by 6.7 percent and production up by 5.7 percent. However, the export numbers seem to be slightly on the weaker side and that's weighing on to this space as well.

It really is going to be about what China does in the sense of demand. Are they going to be restocking as we get into a better period? Also, it is going to be about the dollar, the crude oil prices, the US Fed tapering. So all of these are keeping the markets quite busy and jittery, but the markets do believe that from here as well another couple of percentage points of a decline is what the rubber prices will see before this see any support.