Thailand, the world’s biggest rubber producer, will propose extending a reduction in exports from top suppliers for a further year to curb a slump in prices, said Deputy Farm Minister Yuttapong Charasathien.
“If the situation persists, top producers may prolong the measure by another year,” said Yuttapong, who is in charge of the nation’s rubber policy. Thailand, Indonesia and Malaysia, which represent about 70 percent of global output, will meet in Phuket on April 10-12 to discuss the plan, he said.
Rubber traded in Tokyo plunged 18 percent from this year’s peak of 337.8 yen a kilogram ($3,537 a metric ton) on Feb. 6 as rising stockpiles in China, the top user, spurred concern that demand for the commodity used in tires was weakening. Futures rallied 15 percent in 2012 after the three Southeast Asian countries agreed to limit exports, starting October, and cut down trees, removing a total of 450,000 tons from the market.
The nations have completed the 300,000 tons of planned export cuts and removed aging trees, Yuttapong said by phone. Inventories in China climbed to 113,803 tons, the highest level since January 2010, the Shanghai Futures Exchange said March 15.
Thailand has put on hold plans to plant trees and will review its domestic purchase program when it ends in March, the minister said. The country has no plan to sell from stockpiles accumulated after the government started a 45-billion baht ($1.5 billion) price-support program for its farmers last year.
Rubber for delivery in August gained 2.3 percent to 277 yen on the Tokyo Commodity Exchange by 11:36 a.m. local time.
Source: Bloomberg
