BANGKOK: Thailand, the world’s biggest rubber supplier, said it will hold talks with Indonesia and Malaysia to seek ways of stabilizing rubber prices that have slumped 15% in May.
The government is supporting exporters and state agencies in their purchases of rubber on the Tokyo and Shanghai exchanges, the farm ministry said in a statement today. The ministry is co-ordinating with Indonesia and Malaysia to set a date for the meeting, it said.
Rubber declined to the lowest level in more than four months after European leaders clashed over joint debt sales, raising concern that the euro crisis may worsen and countering optimism over purchases by Thai exporters.
Meanwhile, rubber shippers from Thailand, the world’s largest producer, have started purchases on the Tokyo and Shanghai exchanges to shore up prices, said the Thai Rubber Association.
"Exporters have bought the rubber on the exchanges as it is cheap," President Prapas Euanontat said by phone from the southern province of Nakhon Si Thammarat.
"Shippers will continue buying on overseas bourses until local prices climb to 120 baht or US$3.80 a kilogram, the level the government would like to see," he added.
Production in Indonesia, the second-largest shipper, will be 50,000 tons lower this year from last year’s 3 million tons, Asril Sultan Amir, chairman of the Rubber Association of Indonesia, said in an interview.
Indonesia will produce 2.95 million tons this year from 3 million tons in 2011 because of a prolonged rainy season, said Asril Sultan Amir, chairman of the Rubber Association of Indonesia. The country exported about 2.5 million tons of rubber last year, he added.
Global natural rubber consumption is set to expand 3.4% to 11.3 million tons this year, while production climbs 3.2% also to 11.3 million tons, according to International Rubber Study Group.
The September-delivery contract on the Shanghai Futures Exchange gained 0.3 percent to end at 24,205 yuan ($3,815) a ton.
October-delivery rubber lost 1.7% to end at 265 yen a kilogram or US$3,336 a metric ton, the lowest settlement price for the most-active contract since December 30, on the Tokyo Commodity Exchange.
Futures have dropped 5.5% in the past two days as economic growth slowed in China, the largest buyer. (Bloomberg/T03)
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