Rubber declined from the highest level in
more than seven months on concern that U.S. budget talks were deteriorating and
as gains in the Japanese currency reduced demand for yen based contracts. The
yen strengthened against all of its 16 major counterparts on the U.S. budget
impasse and as the Bank of Japan ends a two-day meeting, at which it is
expected to expand monetary stimulus. Crude oil, used to make synthetic rubber,
fell from the highest level in two months.
According to White House Communications
Director Dan Pfeiffer, House Speaker John Boehner’s budget proposal would put
big burden on the middle class and President Barack Obama would veto it.
Failure to reach a compromise would trigger next month more than $600 billion
in spending cuts and tax increases.
The World Bank has expressed concern over the
Thai government's support scheme due to its high cost and large losses. While
predicting that the global prices of rice and rubber - both major Thai export
commodities will likely fall next year.
Spending has helped stimulate the Thai
economy this year while the global economy is weakening. The World Bank urged
the government to review all of its populist policies aimed at stimulating
economic growth. The measures include the tax rebate for first-time car buyers,
tax exemption for first-house buyers, the minimum-wage increase and a cut in
corporate income tax. The current set of stimulus programmes amounts to 5.4% of
GDP this year, and an estimated 2.4% in 2013.
On 21st December, RSS3 grade closed with a positive
note at `.173.49 per kg at Bangkok, while Malaysian SMR 20, which
Indian tyre makers prefer to import, closed at `.158.90 a kg. On the
Tokyo Commodity Exchange, January futures series currently trades at ¥268.6 per
kg, February at ¥271.1 and May 2013 at ¥282.5 per kg.
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