Jan. 19 (Bloomberg) — Thailand, Indonesia and Malaysia, the world’s three biggest rubber producers, view the current price as appropriate and agreed to take steps to counter any negative trends.

“Everyone is very happy,” Bernard Dompok, Malaysia’s plantation industries and commodities minister, said today after meeting counterparts in Kuala Lumpur. “Current prices of rubber are conducive for production of more rubber.”

Futures more than doubled last year, the best performance since at least 1976, on optimism that a recovery from the worst global recession since World War II would fuel demand for tires and gloves. The three countries will continue to monitor supply and demand and take suitable measures to counter negative price trends, according to a joint statement after the meeting.

“This would have a positive psychological effect on the market,” Rewat Yenchai, an analyst at AGROW Enterprise Ltd., said by phone from Bangkok. “It will help reduce price volatility and limit the downward fall in prices.”

Before the meeting, Apichart Jongskul, secretary-general of Thailand’s Office of Agricultural Economics, had said the three nations may agree at today’s session to support prices if they fall to less than $2,600 a metric ton. Still, Dompok said that “we don’t see the need to look at the threshold prices.”

Thailand, Indonesia and Malaysia harvest about 7 million tons a year, 70 percent of world natural-rubber output.

Global Supply

When Vietnam joins the three countries in the International Tripartite Rubber Council, total production would increase to 76 percent of global supply, while exports will rise to 93 percent from 84 percent, Dompok said.

“Vietnam, being the fifth-largest producer of natural rubber in the world, would strengthen the cooperation among major natural rubber producers,” he added.

The three countries also do not see the need to re-impose export cuts “for the moment,” Dompok told reporters.

The supply-management program run by the three countries had contributed to the improvement in prices, said Bayu Krisnamurthi, Indonesia’s Deputy Agriculture Minister.

Last year, the three producers put on hold plans to curb exports as the global economic recovery boosted prices and demand, the International Rubber Consortium Ltd., which represents growers and exporters, said Oct. 27.

Export Cut

The export cut was implemented after prices fell to 99.8 yen a kilogram ($1,098 a metric ton) in December 2008, the lowest level since August 2002.

Yen-priced futures climbed as much as 2.8 percent to 303.1 yen a kilogram on the Tokyo Commodity Exchange today, nearing a 16-month high of 306 yen on Jan. 15, before ending at 299 yen.

“We will monitor the market very closely,” Krisnamurthi said. “Our main interest is to ensure the rubber prices are attractive to small farmers as well as to others in the industry.”

Rubber will probably maintain an upward trend as key producers showed no intention of increasing shipments, Takaki Shigemoto, an analyst at research and investment company JSC Corp., said by phone from Tokyo.

Source: Bloomberg

[Dow Jones] Tocom RSS3 rubber futures settle lower on profit taking amid weak crude, traders say. “Crude oil prices continue to fall, and this is a signal for rubber investors to take profits despite strong fundamentals,” says analyst in Singapore. Crude oil fell for sixth successive day Monday during Globex electronic session, trading below $78 a barrel. Some investors are on sidelines, waiting to see if any key policy decisions are taken during ministerial meeting of International Tripartite Rubber Council tomorrow in Kuala Lumpur. ITRC comprises Thailand, Indonesia, Malaysia, which together produce around 70% of world”s natural rubber. Benchmark Tocom June contract settles Y3.3 lower at Y294.8/kg. (SAM)

Source: Dow Jones

[Dow Jones] Natural rubber price upside still intact, despite recent gains, International Rubber Consortium Chief Executive Abdul Rasip Latiff says. “The price outlook is positive for the next six months due to strong fundamentals,” Abdul Rasip told Dow Jones Newswires. IRCo parent body ITRC will hold ministerial meeting in Kuala Lumpur Jan. 19. Tocom rubber futures rose above Y300/kg this week for first time since September 2008. IRCo content to let market forces set prices, Rasip said: “Why should we push down the prices? Current prices are favorable for the growers.” Keyword search RUBBER PRICES MAY RISE or, in some systems, follow the link to read more. (SAM)

Source: Dow Jones

BANGKOK, Jan 15 (Reuters) – Tokyo rubber futures dropped nearly 2 percent on Friday due to stop-loss selling, under pressure from weaker oil prices, dealers said.
* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> fell 5.7 yen, or 1.9 percent, to settle at 298.1 yen ($3.27) per kg.
* Oil fell to just above $79 a barrel on Friday and was set for its first weekly drop in more than a month on disappointing economic data and expectations of reduced heating demand in the United States. [ID:nSGE60E04P]
* TOCOM rubber was expected to rebound next week as strong demand on the fundamental front should provide support, dealers said.
* The world’s top three rubber producers, Thailand, Indonesia and Malaysia, will hold a ministerial meeting in Malaysia next week to discuss ways to stabilise prices. [ID:nSGE60D07P] ($1=91.10 YEN)

Source: Reuters

Jan. 15 (Bloomberg) — Rubber fell from a 16-month high as an unexpected decline in U.S. retail sales dented confidence in the strength of the economic recovery, damping demand for the raw material used in tires.

Futures in Tokyo fell as much as 2.2 percent after reaching the highest level since September 2008. Prices also dropped as crude oil in New York declined for a fifth day, weakening the appeal of natural rubber as an alternative to synthetic products made from petroleum.

?€?The U.S. data raised concern that the economic recovery may not be so strong,?€ Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone. ?€?Declining oil was another drag on the price of rubber.?€

Rubber for June delivery lost 1.9 percent to settle at 298.1 yen per kilogram ($3,274 a metric ton) on the Tokyo Commodity Exchange. The contract earlier rose to 306 yen, the highest level since Sept. 9, 2008.

U.S. sales dropped 0.3 percent last month, the Commerce Department said yesterday. Economists expected a 0.5 percent gain, the median of 80 estimates in a Bloomberg survey.

Crude oil for February delivery lost 0.4 percent to $79.09 a barrel at 3:11 p.m. Singapore time, poised for the first weekly decline in five weeks. Prices fell after weekly jobless claims in the U.S., the world?€?s largest oil-consuming nation, climbed 2.5 percent, the most in five weeks.

?€?Major Factor?€?

?€?A decline in crude oil price was a major factor bringing down the rubber price,?€ Pornthip Wongjirattikarn, marketing manager at Future Agri Trade Co., said by phone from Bangkok. ?€?Selling emerged after the TOCOM price failed to stand above 300 yen.?€

Rubber futures have gained 8 percent this month, after doubling last year, as rising car sales in China, the world?€?s largest consumer, boosted demand for the commodity used in tires.

China overtook the U.S. in 2009 as the world?€?s largest automobile market with sales surging 46 percent to 13.6 million, according to the China Association of Automobile Manufacturers. Ford Motor Co. and Honda Motor Co. are running their Chinese factories at full capacity, and still can?€?t deliver enough cars.

Thailand, Indonesia and Malaysia, the world?€?s three biggest rubber producers, are drawing up a plan to support prices should they decline to less than $2,600 a ton and are set for a ministerial meeting on Jan. 19 in Kuala Lumpur.

Indonesia and Thailand have agreed in principle to the plan, which may involve buying and stockpiling rubber if it falls to less than that level, according to Apichart Jongskul, secretary- general of Thailand?€?s Office of Agricultural Economics.

Rubber for May delivery on the Shanghai Futures Exchange tumbled as much as 3.7 percent to 24,820 yuan ($3,636) a ton, before settling at 25,290 yuan. It climbed to 26,170 yuan on Jan. 11, the highest level since July 2008.

Source: Bloomberg