Rubber Gains as Thai Exporters Raise Offers on Output Drop

Rubber Gains as Thai Exporters Raise Offers on Output Drop
Dec. 1 (Bloomberg) -- Rubber advanced as shippers in Thailand, the world’s largest producer and exporter, increased prices to foreign buyers after rain and flooding curbed production.
Futures in Tokyo may extend gains after increasing by the most in a week yesterday as Thai exporters boosted prices of so- called RSS-3 grade rubber for January shipment to $2.70 a kilogram today from $2.64 as of Nov. 27, said Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo.
“Supply of raw material remains tight after rain and flooding disrupted tapping in the southern part of Thailand,” Shigemoto said by phone today.
Rubber for May delivery, the most-active contract, added 0.5 percent to 248.2 yen per kilogram ($2,856 a metric ton) on the Tokyo Commodity Exchange at 11:22 a.m. local time after trading between 246.2 yen and 249.2 yen.
The contract advanced 2.4 percent yesterday, the largest daily gain since Nov. 19, amid speculation the impact on global markets from Dubai World’s request to delay debt payments will be limited. The company said it began “constructive” talks with banks to restructure $26 billion of debt.
Rubber futures also increased as the dollar declined for a second day against the euro, raising speculation that investors will seek commodities as alternative assets, Shigemoto said.
The dollar dropped as easing concerns over credit losses in Dubai and signs the global economy is on the mend boosted demand for riskier assets.
Supply Concern
Rubber futures reached the highest level in 14 months Nov. 26 amid concern supply from Thailand will drop. Rubber plantations in the four Thai provinces affected by flooding accounted for about 20 percent of the country’s total plantation area of about 2.7 million hectares (6.7 million acres), according to the Rubber Research Institute of Thailand.
Rubber for March delivery on the Shanghai Futures Exchange lost 0.8 percent to 21,575 yuan ($3,160) a ton at 10:10 a.m. local time