Rubber Gains After Oil Rallies, Thailand Forecasts Output Slump

Rubber Gains After Oil Rallies, Thailand Forecasts Output Slump
Nov. 5 (Bloomberg) -- Rubber gained for a second day as a rally in oil boosted the cost of making rival synthetic products used in tires and Thailand forecast a slump in output because of heavy rain.
Futures in Tokyo gained as much as 0.9 percent after crude oil jumped to a two-week high yesterday on a report showing supplies in the U.S., the world’s biggest energy consumer, unexpectedly declined. Rubber output in Thailand, the world’s biggest producer, will fall by at least 20 percent this year, the nation’s director-general of agriculture said yesterday.
April-delivery rubber rose as much as 2.1 yen to 230.5 yen a kilogram ($2,545 a metric ton) on the Tokyo Commodity Exchange and traded at 228.5 yen at 9:50 a.m. local time.
Thailand’s output “will not be more than 2.5 million tons” this year compared with 3.1 million tons last year, Somchai Charnnarongkul said at a conference in Ho Chi Minh City yesterday. Production may drop to between 2 million and 2.5 million tons, he said.
Thailand, Indonesia and Malaysia, the three biggest producers, suspended a plan agreed last year to pare exports after the global economic recovery restored demand, the International Rubber Consortium said last month.
Stockpiles held from last year means Thailand should export about 2.7 million tons this year, Somchai said.