March 26 (Bloomberg) — Rubber jumped to the highest price since September 2008 after an Indonesian producers’ group said that output may decline this year.

Futures in Tokyo rose as much as 2.9 percent, extending yesterday’s 3.3 percent gain after the Rubber Association of Indonesia said on March 24 that output in the second-largest producer may drop to 2 million metric tons this year, from 2.4 million tons in 2009.

“Given Indonesia’s lower output forecast earlier this week, it’s hard to bet on a price decline,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. The forecast “sent futures in Shanghai and Tokyo higher yesterday” amid increased demand for the commodity used in tires, especially from China, he said.

Rubber for August delivery jumped 2.9 percent on the Tokyo Commodity Exchange to 306.1 yen, the highest closing price since Sept. 9, 2008. The most-active contract climbed 5.9 percent this week, the first weekly gain in four.

Output from Indonesia may slump this year if unfavorable weather persists into the second half after rains disrupted first-quarter tapping, Asril Sutan Amir, chairman of the Indonesian industry group, said on March 24.

In the cash market, shippers in Thailand, the world’s largest producer and exporter, offered RSS-3 grade rubber for May shipment at $3.32 a kilogram, from $3.30 yesterday, according to Takaki Shigemoto, an analyst at research and investment company JSC Corp.

Production declines in Thailand from February to April, when rubber trees shed leaves and latex production slows during a period known as wintering.

Rubber for September delivery advanced for a third day on the Shanghai Futures Exchange, settled 0.7 percent higher at 24,855 yuan ($3,641) a ton after touching 25,025 yuan, the highest since March 1.

Source: Bloomberg

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