Asia Rubber-Traders eye producers’ meeting as Indonesian sellers hold off

* Top producers to meet on Thursday in Kuala Lumpur

* Raw material shortage continues in Indonesia

* Deliveries from Indonesia delayed, contract volumes cut

By A. Ananthalakshmi

SINGAPORE, Nov 19 (Reuters) – A few rubber cargoes changedhands in Asia this week as traders looked to a meeting of topproducers on Thursday for stronger measures to support depressedprices, including a potential cut in exports.

The meeting in Kuala Lumpur will be attended by ministersfrom Thailand, Malaysia and Indonesia, countries that form theInternational Rubber Consortium, along with officials fromCambodia, Laos, Myanmar and Vietnam.

The seven producers, accounting for 77 percent of the globalnatural rubber output will consider measures to push up prices,including restrictions on supply to global markets.

“They have been talking about taking steps to support pricesbut prices are determined by real market participants, andsupply and demand,” said a Malaysian trader.

“They can try to restrict quantities or set a price level,but the real question is what can they do to implement that?”

Last month rubber associations from Thailand to Cambodiaurged producers not to sell the commodity below a minimum priceof $1.50 per kg and top producer and exporter Thailand approveda 58 billion baht ($1.8 billion) subsidy plan to supportfarmers.

Benchmark Japanese rubber futures hit a 3-1/2-monthhigh of 208 yen ($1.77) per kg earlier this week, but theyremained not far above a five-year low reached in October.

In physical deals, top tyre maker Bridgestone Corp bought Indonesian grade SIR20 at 67.75 cents per pound ($1.49per kg) for February shipment, below the $1.50 price flooragreed among producers in October. A cargo for March deliverywas sold at 68 cents per pound.

Many Indonesian producers were still not keen on selling,said a Jakarta-based trader.

“Current price levels are not good and supply of rawmaterial continues to be very tight,” he said.

Due to weaker prices, many farmers have abandoned tapping tolook for other jobs, leading to a shortage in raw material anddelays in deliveries.

“Delays range from one to three weeks and are continuing.Producers have also cut quantity of long-term contracts becausethey are afraid they cannot fulfil them,” the trader said.

Thai-grade STR20 was offered at $1.52-$1.57 per kg, whileRSS3 was offered at $1.62-$1.65 per kg, a Malaysian trader said,slightly lower compared to traded levels last week.

(1 US dollar = 32.8100 Thai baht)(1 US dollar = 117.3300 Japanese yen) (Editing by Manolo Serapio Jr. and Anupama Dwivedi)

– Reuters