Sunday, August 26, 2012

Market still lack confidence


Rubber futures gained at Tokyo Commodity Exchange tracking US economic data which showed mixed trends. January futures gained immediately after the three major producers - Thailand, Indonesia and Malaysia announced measures to cut exports and trim production. Fundamentals are not supportive for rubber although firm crude oil prices are providing firm support and partly on hopes that the US, Europe and China would do more to increase growth in their respective economies.

On TOCOM rubber futures, August series is currently trading at ¥209 per kg, September at ¥217.4, December at ¥222.2 and January 2013 at ¥223.8 a kg. The market is still lacking confidence, which can be noticed in 27th August current trading for August delivery.

Earlier, rubber growers in Thailand’s southern provinces had rallied at the Provincial Administration Office and set a 15 day deadline for the government to resolve the declining price of natural rubber.

The top three rubber producers, under the International Tripartite Rubber Council, will establish the mechanism to ensure that natural rubber price remains stable and is expected to meet in the first week of September at Bandung-Indonesia. Two major rubber importing countries - China and India is also expected to attend this meeting.

Before these measures comes into effect, natural rubber prices are bound to rise, as a safety measures to be taken by the consumers having future outlook. Practically speaking is it possible for the grower to trim production or the countries to cut export?

Read lot more in Rubber4U – 1st September 2012 issue

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