Economy struggling, don’t expect much

On 16th January, Crude oil settled at US$30.39 per barrel after dipping to US$29.19 per barrel on 15th January for the first time since December 2003.

After years of impressive growth, Thailand's economy is struggling. Earlier this month, World Bank forecast that Thailand's gross domestic product (GDP) growth rate would slip from 2.5% in 2015 to just 2% this year. While National Farmers' Council (NFC) of Thailand estimates the production cost of rubber sheets at around Bt60 per kg and had proposed that the government buy latex at Bt55-Bt56 per kg and rubber sheets at Bt60 per kg. While Prawit, who chaired the committee's first meeting said, this price of Bt45 per kilo for rubber sheets is agreed upon by all sides concerned. The government has enough budget to fund the measure so do not worry about its funding. Interior Minister General Anupong Paochinda said the government would most likely begin to buy the rubber sheets in 14 southern provinces first as they were suffering the most. Rubber Authority of Thailand had agreed to buy 100,000 tonnes of all type of rubber products directly from 2,000 farmers in the South and 1,000 farmers in the northern and northeastern regions. The government has put the limit of 150 kg that each rubber farmer will be able to sell to the government and rubber purchases will kick off on 25th January and had decided to set up 3,000 purchasing points across the country to buy rubber from farmers.

The benchmark RSS4 grade rubber closed at `.97 a kg at Kottayam, while RSS3 grade closed at `.86.29 a kg at Bangkok and Malaysian SMR20 closed at `.73.17 a kg. On National Multi Commodity Exchange January 2016 futures closed at `.97.42 a kg, February at `.97.83, March at `.99.03 and April closed at `.102.13 a kg. On Tokyo Commodity Exchange, January 2016 futures series closed at ¥145.6 a kg, February at ¥148.7, March at ¥151.5, April at ¥154.3, May at ¥156.7 and the contract for delivery in June 2016 closed at ¥157.7 a kg. On Monday, most probably Tocom futures contract for delivery in June 2016 may trade in the range of ¥152 & ¥160 a kg.

To read Rubber4U – 15th January 2016 issue: http://rubber4u.com/Public/Abcd.pdf

For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf