MARKET COMMENTARY
Retreat in crude oil prices along with fall in equities dragged lower TOCOM rubber futures from the three week high on Wednesday.
Bearishness prevailed in local natural rubber market as weak demand continued to suppress prices. On Tuesday, quotes for RSS4 in the spot market stayed in the vicinity of the more than six year lows while NMCE rubber futures inched up.
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Thai government spokesman Maj. Gen. Sunsern Kaewkumnerd said on Tuesday that the cabinet has approved allocation of 5.47 billion baht ($151 million) from the state budget to buy up to 100,000 metric tons of rubber directly from local farmers for 45 baht ($1.24) a kilogram.
China economy grew 6.8 percent in the Q4 of 2015, its weakest since 2009, putting the full year growth by 6.9 per cent; it’s slowest in 25-years. Industrial production and retail sales climbed 5.9 and 11.1 per cent respectively in December.
Weekly data from SHFE showed rubber inventories in the warehouses monitored by exchange rose 2.1 per cent to 261766 tonnes last week.
Thai government has ordered eight ministries to buy rubber to help struggling farmers.
China imported 500,000 tons of natural and synthetic rubber in November 2015, representing an increase of 51.5 per cent compared to the same month of 2014, according to statistics released by the General Administration of Customs of China.
The Thai government threatened on Thursday to cut rubber export quotas if traders did not play their part in stemming a slide in prices that has taken the value of the raw material to a seven-year low.
[embeddoc url=”https://drive.google.com/file/d/0BzrsaGiMYhEkYV9OcEoxWG9fbGM/preview” viewer=”drive”]Geofin Comtrade
