ASEAN KEY DESTINATIONS
Leading rubber growers to stabilize prices
The world's top rubber producing countries, Thailand, Indonesia and Malaysia, will hold an urgent meeting this week to find ways to support prices that have collapsed this month, a senior industry official said on Tuesday.
The price of Thai USS3, a raw material for export-grade rubber sheet, fell to 90 baht ($2.95) per kilogram on Tuesday from 95 baht on Monday. That is half the record high of 180 baht hit in mid-February.
Rubber futures on the Tokyo Commodity Exchange, which tends to set global prices, started falling this month when unrest in the Middle East raised concerns about the global economy and rubber demand. Friday's earthquake in Japan added to these concerns.
The consortium brings together rubber industry officials, exporters and government officials from the three countries that together account for 70 percent of global rubber output. Any decision by the IRC would have to be ratified by the International Tripartite Rubber Corporation, which groups senior government officials from IRC countries.
Tokyo's benchmark rubber contract for August delivery hit a low of 335.0 yen ($4.10) per kilogram on Tuesday, 12 percent down from Monday's close of 384.1 yen. At that point it had dropped nearly 40 percent from a record high of 535.7 yen hit in mid-February. The benchmark settled at 353 yen.
Rubber futures slumped on Monday, leading to a temporary halt in trade, as rumors circulated that some buyers had defaulted on shipments of physical rubber. Thai RSS3 traded at a four-month low of $4.18 to $4.20 per kilogram on Tuesday, against record-high offers at $6.40 in mid-February.
However, there were no reports of shipment cancellations.
The Thai government would do everything within its means to push prices higher, Thai Deputy Prime Minister Suthep Thuagsuban said on Tuesday, urging farmers not to sell at current levels.
He said the National Rubber Committee would meet next week to issue measures to prop up prices, including buying rubber directly from farmers to be kept in stockpiles.
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