Rubber prices under pressure

Thailand military government has approved the sale of the country's accumulated rubber stocks and is in negotiations with potential buyers. Country spent $689 million in accumulating rubber stocks under earlier programs.

The National Council for Peace and Order (NCPO) has approved a budget of 5.94 billion baht for the overhaul of the rubber industry as proposed by the Natural Rubber Policy Committee. The measures involve maintaining a stock to stabilise prices, improving planters’ liquidity, developing the rubber market and conducting research and development on rubber products. NCPO has also agreed to allocate 10 billion baht to be loaned to farmers’ organizations to buy rubber from the planters and another 15 billion baht to be lent to private companies to upgrade their machinery in the production of finished rubber products.

In an effort to help Vietnamese companies compete in the world market, the Ministry of Finance is considering cutting the rubber export tax to zero from the current rate of 1%.

The benchmark RSS4 grade rubber closed at `.129 a kg at Kottayam, while RSS3 grade closed at `.109.86 a kg at Bangkok and Malaysian SMR20 closed at `.100.25 a kg. On National Multi Commodity Exchange September 2014 futures closed at `.127.05 a kg, October at `.125.95, November at `.126.44 and December at `.126.84 a kg. On Tokyo Commodity Exchange, August 2014 futures series closed at ¥187.3 a kg, September at ¥189.2, October at ¥192.6, November at ¥195.6, December at ¥197.7 and the contract for delivery in January 2015 closed at ¥199.6 a kg. On Wednesday the market is expected to trade in the range of ¥198 & ¥202 a kg and may close in green.

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