JAKARTA, Oct 23 (Reuters) – Indonesia’s main rubber group has asked its members to impose strict limits on sales until the second quarter of 2015, an official said on Thursday, the second attempt in less than a month to support prices by the world’s second-biggest producer.
Late last month, the Indonesian Rubber Association (GAPKINDO) sent a letter to members and fellow rubber-producing countries asking them to put a floor under prices at $1.50 per kg after global prices plunged more than 30 percent this year.
Thailand, Malaysia, Vietnam and Cambodia all agreed to urge their growers not to sell rubber below $1.50 per kg, which helped stabilise prices, even though some cargoes were still being sold below the minimum.
In a second letter sent on Oct. 22, GAPKINDO asked members to limit the volume, frequency and length of contracts and deals until the end of the first quarter next year, Rusdan Dalimunthe, executive director at the association, told Reuters.
“We sent it to all members of GAPKINDO and also to the directors of groups in Thailand, Malaysia, Vietnam and also Cambodia,” Dalimunthe added. “(Global) prices have already slightly gone up but not by as much as we want.”
Similar attempts to support prices by dominant rubber producers Indonesia, Thailand and Malaysia have had limited success in the past due to the different levels of upstream and downstream industries developed in these countries.
Benchmark Tokyo rubber futures hit a six-week high on Thursday, however, supported by a weaker yen and after Thailand’s cabinet passed a 58 billion baht ($1.8 billion) plan on Tuesday to support rubber farmers.
As part of the measures, Thailand’s state agricultural bank is to provide around 20 billion Thai baht ($618 million) to the state-run Rubber Estate Organisation (REO) to buy rubber from the market.
(1 US dollar = 32.3400 Thai baht)
(Reporting by Michael Taylor; Editing by Alan Raybould)
