Is Thailand in the process of levy waiver!

As Asia began to cool off and the West remained sluggish, the prices of natural rubber have crashed, threatening the incomes of millions of farmers. Rubber farmers have blocked roads and railways in the past week to pressure the government to guarantee rubber prices as it has done for rice growers. Thailand government may waive levies on rubber exports so that shippers can pass on the saving to farmers. Thai government is likely to advise exporters to purchase raw rubber at prices above market rate.

Rubber resumed a rally as optimism grew that Europe’s economy may solidify its recovery and signs of renewed strength in the Chinese economy. China accounts for 33% of global demand and tyres represent 70% of natural rubber consumption in the country.

China has stepped up its rubber production over the last five years as it seeks to meet rising domestic demand and reduce imports. Production has also risen in other emerging producing countries like Vietnam, Laos, Cambodia and Myanmar.

From 2008-12, global rubber production increased by 3.7% a year, from 10.1 million tonnes in 2008 to 11.4 million last year. It is expected to reach 11.6 million tonnes this year. Consumption also increased by 3.1% a year for the same period, from 10.2 million tonnes in 2008 to 10.9 million last year. It is projected to reach 11.1 million tonnes this year.

At Kottayam, RSS4 grade closed at `.185.50 a kg, while RSS3 grade closed at `.178.62 a kg at Bangkok, Malaysian SMR20 closed at `.163.75 a kg. On the Tokyo Commodity Exchange, September futures series closed at ¥256.4, October at ¥258.8, November at ¥260, December at ¥263.1, January 2014 at ¥266.9 and the contract for delivery in February 2014 closed at ¥269.1 a kg. While on the National Multi Commodity Exchange September futures closed at `.183.50 a kg, October at `.182.75, November at `.183.24 and December at `.183.70 a kg. Tommorrow further downward trend can be noticed.

Read lot more in Rubber4U – 1st September 2013 issue