SINGAPORE, Nov 5 (Reuters) – Tokyo rubber futures, which set the tone for physical prices, will be confined to a tight range this week as speculators turn their attention to the U.S. presidential election and persistent worries about the global economy, dealers said on Monday.
Among other commodities, Thai sugar premiums face competition from Brazilian sweetener, and Vietnam coffee prices could fall as the crop harvest picks up, but cocoa butter enjoys strong demand from European chocolate makers.
Global benchmark rubber futures on the Tokyo Commodity Exchange, April 2013, fell 3 percent to their weakest since late October, to stand around 247 yen a kg on Monday, after equity markets dropped ahead of the U.S. election and investors ignored strong U.S. jobs data.
“On a technical point of view, we need TOCOM rubber to break the 260-yen level to see a sustained rally,” said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore, adding that a recent move by main producers to curb exports had been priced in.
“I think the most supportive factor will be the weakening of the yen.”
Tokyo futures have fallen around 8 percent in the past month, reigniting fears that main consumer China could cancel or default on shipments as tyre grade prices in Southeast Asia also slip.
Late last year, the ASEAN Rubber Business Council blacklisted buyers who defaulted on shipments and urged members to ignore requests from Chinese buyers for discounts following a plunge in prices.
“Prices keep falling but so far, we have haven’t heard about cancellation from China,” said a dealer in Indonesia’s main growing island of Sumatra. “We tried to offer rubber at 280 to 282 cents a pound on Friday, but there were no deals.”
Source: Reuters
