Harrisons Malayalam Gained On Surging Rubber Exports 
      
                       An integrated agriculture operation giant, Harrisons 
                       Malayalam Limited, is India's biggest producer of rubber, 
                       South India's major cultivator of Tea and perhaps the largest 
                       farmer of Pineapple in the region. It is also a chief processor of 
                       other agricultural produce from neighboring farmlands. The 
                       company also produces slighter quantities of a variety of other 
                       exotic horticultural crops like Areca nut, Banana, Cardamom, 
                       Cocoa, Coffee, Coconut, Pepper and Vanilla as well as 
                       restricted quantities of Organic tea and Spices. 
      
     Today, Harrisons Malayalam share price gained over 7 per cent in trade today, majorly 
     because the rubber export is gaining momentum and the company is among the largest 
     producers of rubber. Harrisons Malayalam is the top 500 performing stock for the quarter by 
     Dynamic Levels. 
      
     The Rubber export story: 
     Due to the price advantage, export of rubber has picked up momentum. The price of natural 
     rubber in India which had been reigning high over international market prices since 
     December 2013 has declined in the third quarter of 2016. From the second week of 
     November 2016, the international prices of natural rubber shot up and are currently perched 
     at higher levels compared to Indian prices. 
      
     The rise in international rubber price was because of the increased demand for rubber from 
     China, upward trend in crude oil price, appreciation of US dollar etc. Natural rubber is 
     mainly an export commodity in the major natural rubber producing countries like Thailand,  
     Malaysia, Indonesia, Vietnam etc. and rubber prices are highly responsive to speculative 
     news from major consuming countries like China, India, Japan etc. 
      
     
     
    The abrupt upward trend witnessed in international rubber price is due to the existing 
    speculative trend, owing to the aforementioned reasons coupled with the surge in Shanghai 
    and Tokyo Commodity exchanges in China and Japan. In India, natural rubber is usually not 
    an export commodity and the major share of the rubber produced in the country is consumed 
    domestically. So the reaction to speculative price movements due to reasons not specific to 
    domestic market will be comparatively less in India as compared to other major natural 
    rubber producing countries. However, the Indian rubber prices generally track international 
    prices and the market perpetually adjusts to international prices at once, often with a time lag. 
     
    Rubber Board is keen in capitalizing on the price advantage by promoting export of natural 
    rubber. This would raise domestic natural rubber price to the world market levels. This will 
    undoubtedly benefit the companies like Harrisons Malayalam, the ones who produce rubber.  
     
    Owing to unattractive relative prices, India's exports have been insignificant since 2013-14. 
    In 2016-17, during April to October period, India's natural rubber exports were hardly 650 
    metric tonnes. Exports gained thrust in November - December 2016 and it is expected that 
    India's natural rubber export may touch around 5000 tonnes during this year.  
     
    Rubber Board has been endorsing the brand "Indian Natural Rubber" for exports, by which 
    the quality of rubber exported from the country is certified by the Board. Eighty percent of 
    the export done so far this financial year was under the brand "Indian Natural Rubber". The 
    branding of natural rubber is instrumental in repossessing the market share of Indian 
    exporters as the exports from India have been negligible during the last three years. Export of 
    the natural rubber is an alternative marketing channel and such efforts will help to maintain 
    consistency in the domestic market price. 
     
     
     
     
               
               
               
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              his Relative:  
               
                        Do not have any financial interest / any actual/beneficial ownership in the subject company.  
                        Do not have any other material conflict of interest at the time of publication of the research report  
                        Have not received any compensation from the subject company in the past twelve months  
                        Have not managed or co-managed public offering of securities for the subject company.  
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              Article Written by 
              Tanaya Nath