By Supunnabul Suwannakij April 12– Thailand, Indonesia and Malaysia, the top rubber suppliers, cut exports by 300,000 metric tons as targeted and will discuss replanting as a complementary measure, according to the International Tripartite Rubber Council.
The countries will consider replanting at a meeting in Indonesia next month, Yium Tavarolit, chief secretary at the International Rubber Consortium, said in an interview after officials concluded a meeting in Phuket, Thailand. The consortium is the council’s secretariat.
Rubber traded in Tokyo plunged into a bear market this month on signs that weak demand in China, the largest user, will expand a global glut. Futures rallied 15 percent last year, when the three growers, which represent about 70 percent of world production, agreed to limit shipments from October to March and cut down trees, planning to remove a total of 450,000 tons from the market after futures slumped to a three-year low in August.
Member countries have complied with the measures and cut exports by 300,000 tons as targeted, said Yium. He declined to comment further when asked if the officials had discussed the possibility of extending a reduction in shipments.
Futures fell 0.2 percent to 276.4 yen a kilogram ($2,790 a metric ton) today on the Tokyo Commodity Exchange, the global benchmark. Prices lost 8.6 percent this year. Thai rubber free- on-board rose 1.2 percent to 83.25 baht ($2.87) a kilogram yesterday, said the Rubber Research Institute of Thailand.
Thai Cuts
Thailand, the biggest producer, said April 1 it will extend export cuts for 60 days through May. The country plans to lower shipments by 10 percent in that period, Deputy Farm Minister Yuttapong Charasathien said yesterday. He’s the minister in charge of rubber policy.
Producers should focus more on managing supplies from plantations to support prices, rather than cutting exports, Daud Husni Bastari, chairman of the Rubber Association of Indonesia, said March 19. Curbing sales is only a temporary measure and shock therapy for the market, he said.
World reserves are poised to advance to the highest level in 13 years as production exceeds demand through next year, according to London-based industry adviser The Rubber Economist.
Reserves will total 2.17 million tons in 2014, the highest level since 2001, Managing Director Prachaya Jumpasut said April 10.
Inventories in Qingdao, China’s main import hub, reached a record 358,300 tons by March 15, Cai Zhiwei, general manager at the Qingdao International Rubber Exchange Market, said March 22.
The country accounts for 34 percent of global demand, estimates the Singapore-based 35-nation International Rubber Study Group.
Source: Reuters
