BANGKOK: Thailand, the world’s biggest rubber producer and exporter, will not extend restrictions on exporting the commodity when the measure expires on May 31, a government official said on Thursday, adding that the curbs had little impact on prices.
Thailand, Indonesia and Malaysia had originally agreed to cut exports by a total of 300,000 tonnes from October. That scheme ended in March but Thailand said it would continue the curbs for another two months to the end of May.
“There is no point in continuing with the measure as it has had very little impact on the rubber market and prices have already rebounded through the market mechanism,” said Amnuay Patise, an adviser to the Deputy Agriculture Minister, who oversees rubber matters.
Benchmark Thai smoked rubber sheet (RSS3) hit a record high of US$6.40 per kg in February 2012 before weak global demand pushed prices down to less than half that value at US$2.75 by the middle of the year. That prompted the export curbs in October by what were then the top three rubber-producing countries.
The curbs allowed Vietnam to overtake Malaysia in 2012 to become the third-biggest exporter.
Rubber prices only started to rebound in April, after the dry season in southern Thailand, the country’s main rubber region, had cut supply substantially.
RSS3 was offered at US$3.00 per kg on Thursday.
“I think current prices are acceptable, and both buyers and sellers are happy with them. So it’s good that the government is letting prices move freely,” said a trader in Hat Yai, where Thailand’s rubber market is based.
Traders said physical rubber prices were expected to remain supported as supply remained low, although farmers had resumed tapping in late April, when the dry season ended.
“There was unseasonable rain in several areas in the south, which disrupted tapping and cut supply.
So prices should stay near US$3.0 per kg for weeks,” one exporter said.– Reuters
