Major rubber producing countries to meet to discuss how to prop up prices

International Rubber Study Group announced a Sustainable Natural Rubber Action Plan with the key objective to promote the use of voluntary sustainable natural rubber standards throughout the global rubber economy. TOCOM rubber futures rebounded from the one month lows after expansion in auto sales in the US. However, gloomy economic outlook and surplus market situation seen for the current year is likely to maintain a bearish trend.

The wintering season drawing to a close in northern Indonesia, Malaysia and Thailand, futures of natural rubber in TOCOM was seen trading down as farmers return to tapping, which may increase the supply of natural rubber as the days advance. Rubber for delivery in November touched a low of ¥246.8 a kg and closed at ¥247.7 a kg on the Tokyo Commodity Exchange. The prices of RSS4 grade closed at `.171 a kg at Kottayam and RSS3 closed at `.162.95 a kg at Bangkok, while Malaysian SMR20 closed at `.134.12 a kg. While on the National Multi Commodity Exchange, October futures were trading in negative at `.160.90 a kg., at 4.15 pm IST.

Thailand, Indonesia and Malaysia, will meet next week to discuss measures to stabilise prices. Thailand is expected to propose new export curbs or measures to limit supply as a way of propping up prices and support farmers. The meeting of senior officials from the three countries would be held during 12-14th June in Palembang, Indonesia.

According to the Association of Natural Rubber Producing Countries report, Indonesian natural rubber production is expected to gain 5% to 3.18 million tonnes and Malaysia’s output may increase 6.2% to 980,000 tonnes.