PHUKET – Rubber exporters from Thailand, Indonesia and Malaysia, the world’s top producers, will meet next month to discuss ways to minimise price differences between shipments to help stabilise global rates.
Indonesian supplies are currently 30 US cents a kilogramme cheaper than those from Thailand and 15 cents cheaper than those from Malaysia, said Pongsak Kerdvongbundit, honorary president of the Thai Rubber Association.
“The price difference currently is too wide and unstable,” he said on the sidelines of an industry conference in Phuket on Friday.
Rubber futures prices in Tokyo plunged into a bear market this month on signs that weak demand in China, the largest consumer, will expand a global glut.
The top producers, which represent about 70% of world output, concluded a three-day meeting on Friday in Phuket where they discussed measures to spur prices, including an extension of export cuts.
Thailand, the largest producer, plans to lower shipments by 10% through end of May, Deputy Agriculture Minister Yuthapong Charassathien said on Thursday.
“A suitable range should be set to avoid undercutting each other on prices and lowering export income,” said Mr Pongsak.
“We had informal talks with Indonesian and Malaysian exporters and will further discuss at the next meeting of the Asean Rubber Business Council and during the Thai Rubber Association annual meeting, both in May.”
Futures prices fell 0.2% to 276.4 yen a kilogramme ($2,790 a tonne) on Friday on the Tokyo Commodity Exchange, the global benchmark.
Prices are down 8.6% this year after rallying 15% in 2012 when the three countries agreed to restrict shipments from October to March and cut down old trees. They set a goal to remove a total of 450,000 tonnes from the market after futures slumped to a three-year low last August.
Thai exporters have been buying rubber from Tokyo where prices are cheaper, said Mr Pongsak. “Purchases will continue as long as Tokyo prices are lower than those of Thailand.”
In the Hat Yai central market, Thai rubber free-on-board climbed 1.2% to 83.25 baht a kilogramme on Friday, according to the Rubber Research Institute of Thailand.
World rubber stockpiles are poised to advance to the highest level in 13 years as production exceeds demand through next year, according to the London-based industry adviser The Rubber Economist.
Stocks will total 2.17 million tonnes in 2014, the highest level since 2001, managing director Prachaya Jumpasut said on Wednesday.
Inventories in Qingdao, China’s main import hub, reached a record 358,300 tonnes as of March 15. China accounts for 34% of global demand, according to International Rubber Study Group.
Source: bangkokpost.com
