BANGKOK, Nov 24 (Reuters) – The world’s top three rubber producing countries will meet on Thursday to seek ways to shore up prices hit by sagging demand and fears of a global recession, a spokesman for the group said on Monday.
The meeting of the International Rubber Consortium (IRCo), which comprises Thailand, Indonesia and Malaysia, will discuss a variety of possible measures, including a rubber buying scheme to help support prices now near 4-year lows.
“After our last meeting in October, we came up with measures to cut supply, but prices kept falling. So, we need to meet again to discuss the situation,” IRCo chief secretary Yium Tavarolit told Reuters.
The price of Thai USS3, the raw material export-grade rubber sheet (RSS3), fell to 43 baht per kg on Monday, the lowest since February 2005, due to falling demand, traders said.
The IRCo, whose members account for 70 percent of global rubber output, agreed on Oct. 17 to jointly cut production by 215,000 tonnes, or 3 percent, next year.
But the market largely ignored the measure.
“Prices do not reflect the real market situation. It’s down because of speculation in the futures market. That’s why we need to meet again to do something,” Yium said.
Tokyo rubber futures prices (TOCOM) fell to a near 4-year low on Friday due to stop-loss selling as players liquidated contracts to avoid risks after oil fell below $50 a barrel.
TOCOM rubber rebound slightly to settle at 138.0 yen ($1.44) per kg on Friday. The market was closed on Monday for a public holiday and trading will resume on Tuesday.
Dealers said they expected TOCOM prices to fall further on Tuesday due to weaker oil prices which were unlikely to rebound significantly.
“Some pessimistic dealers expect TOCOM prices to fall below 100 yen on fears of falling demand,” a trader in Thailand Hat Yai Rubber centre said, noting that auto sales were slumping worldwide.
($1=95.91 Yen)

Source:  Reuters

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