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Asia Softs-Tokyo rubber near 5-year low, cocoa awaits Q3 data

* TOCOM rubber seen in 170 to 180 yen/kg range this week

* Supply dictates sugar, coffee premiums

* Cocoa market awaits Q3 grinding data

By Lewa Pardomuan

SINGAPORE, Oct 6 (Reuters) – Global benchmark Tokyo rubberfutures could trade in a narrow range this week, with the mostactive contract hovering near its weakest level in five years onnagging concerns over demand and oversupply.

Among other soft commodities, Thai raw sugar premiums arelikely to remain unchanged, Indonesian coffee premiums couldwiden further on tight supply, while the cocoa market is waitingfor the release of closely-watched quarterly grinding data.

March rubber on the Tokyo Commodity Exchange waslittle changed at 176.8 yen a kg on Monday, after falling to173.8 yen on Friday, its lowest since 2009. TOCOM rubber, whichsets the tone for tyre grade prices, has dropped more than 35percent this year.

“We may see this week’s trading range at 170 to 180 yen. Wecan’t find enough news or cases to support prices,” said GuJiong, an analyst at Yutaka Shoji Co in Tokyo.

“Mid- or long-term fundamentals are negative and I ambearish. But towards the end of this year, we may see somerebound because of concerns about stock shortages,” said Gu,referring to inventory declines at ports in Japan.

Top rubber producers will meet in Malaysia next week todiscuss measures to support prices, Thailand’s AgricultureMinister said on Monday, as farmers reel from a slide in thevalue of the commodity.

Supply will dictate Thai sugar premiums and coffeedifferentials, while cocoa grinders and dealers will turn theirattention to the third-quarter grinding data to be issued by theMalaysian Cocoa Board and the Cocoa Association of Asia(CAA)later this month.

CAA’s second-quarter data took many dealers by surprise asgrindings rose 5.2 percent to its second highest on recordbecause of new plants in Indonesia. But poor demand for powdercould have forced grinders to slow down in the third quarter.

The Cocoa Association of Asia compiles grindings data fromSingapore, Indonesia and Malaysia.

“I would think grindings will be negative in the thirdquarter. The high bean price has also made life difficult forsmaller companies,” said a dealer in Singapore.

“We heard some of them have decided to stop running theplants because the working capital is too high for them. Somenew plants have even delayed starting operation.”

About 40 percent of cocoa that is ground ends up as powder,another 40 percent as butter and the rest as paste and cocoaliquor. Butter gives chocolate its melt-in-the-mouth texture,while powder is used in cakes, ice cream, biscuits and drinks.

Global bean prices have gone up more than 12percent this year, partly because of speculative buying linkedto fears that the Ebola virus could soon reach majorcocoa-producing regions in Africa.

(Editing by Tom hogue)

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