Asian Rubber Settles Lower; Thailand To Use Rubber Stocks Domestically
12 June 2014, 14:14 SEAST
Benchmark November natural rubber on the Tokyo Commodity Exchange settled 0.5% lower at Y199 a kilogram, breaching the key Y200/kg level in the last half hour of trade after a day of moving in a narrow range. Market confidence was still not strong enough to keep prices above the psychological level, said traders.
The Association of Natural Rubber Producing Countries says in its latest report released late last week that production was crimped by seasonal factors, as well as the depressed market.
“The current situation put a real struggle to producers. It has been reported that rubber farmers started to abandon their holdings,” the association noted in its latest bulletin.
According to the International Rubber Consortium, Thailand’s 210,000-metric-ton stockpile will be used in the construction of infrastructure such as roads, pavements, sports facilities and dams in the country. This comes after a decision by the military junta to not sell the stockpile, added the organization.
The rubber stockpile, which the previous civilian government had acquired through state-funded price support programs, has contributed to a slump in international natural rubber prices this year, with prices falling as much as 30%.
Physical rubber prices were lower with potential buyers holding back to see if losses will be sustained, said traders.