Between August 2012 and March 2013, Thailand,
Indonesia and Malaysia adhered to a pact to cut natural rubber shipments by
300,000 tonnes. Now, Indonesian Rubber Association chairman had sent a letter
to Gapkindo members urging them to reduce natural rubber production in 2014, in
an effort to shore up prices.
The question raised is that what are the
chances of one national organisation getting all those producers to cut
production? But this time it is an advance beginning and could be a different
story as month’s progresses.
Due to massive purchases from China and
optimism that the global economy is rebounding, has pushed up the rubber
prices. On Tuesday, Bridgestone bought SIR20 at US$2.32 to $2.33 a kg, without
freight for February delivery. Bridgestone may be chasing more Indonesian grade.
The market is showing signs of a partial recovery and it is expected that
prices to firm up. Today, Tokyo Commodity Exchange rubber futures contract for
May delivery hit a high of ¥285.5 a kg and later it closed at ¥284.1 a kg.
Growers are expected not to sell the produce
as they usually hold their stocks during December and January if the prices
rule low. According to the Rubber Board of India, country's natural rubber production
in 2013-14 will be 870,000 tonnes. On the other hand, according to growers
production is likely to be around 800,000 tonnes.
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