By Supunnabul Suwannakij
April 1 — Thailand, the biggest rubber producer and exporter, extended curbs on shipments by 60 days to the end of May to boost prices, said Deputy Farm Minister Yuttapong Charasathien.
Thailand, Indonesia and Malaysia, the top producers representing 70 percent of global output, will meet April 10-12 in Phuket to discuss price support measures, including extending export reduction, Yuttapong said by phone from Bangkok today.
Rubber futures in Tokyo were poised to enter a bear market as increasing stockpiles in China signaled easing demand from the world’s largest consumer of the commodity used in tires.
Prices of Thai ribbed smoked sheet No. 3 have fallen to four year lows as the state purchasing program boosts inventories.
Thailand decided to move ahead with extending export cuts by another 60 days while waiting for the decision from our Indonesian and Malaysian counterparts, said Yuttapong, who is in charge of the nation’s rubber policy.
The top producers have completed the 300,000 metric tons of export cuts they announced last year and removed aging trees, according to Yuttapong.
On the domestic rubber purchase program, Yuttapong said Thailand will monitor production rates when tapping resumes around early June before making a decision whether to extend the purchase.
We’re in a low production season and there is no supply we can buy from farmers at the moment, said Yuttapong.
Drought this year will probably delay the resumption of tapping to June and reduce output.
Rubber for delivery in September fell as much as 2.9 percent to 266.1 yen a kilogram ($2,835 a metric ton) on the Tokyo Commodity Exchange and traded at 267.8 yen at 2:56 p.m. local time. A close at or below 267.2 yen would be a decline of 20 percent from the highest settlement this year for a most active contract of 334 yen reached Feb. 6.
Thai rubber free-on-board dropped 0.4 percent to 85.25 baht ($2.91) a kilogram today, according to the Rubber Research Institute of Thailand. That is the lowest level since November 2009, according to data compiled by Bloomberg.
(Source: Bloomberg)
