Rubber Climbs to 16-Month High as Producers Study Support Plan

Rubber Climbs to 16-Month High as Producers Study Support Plan
Jan. 14 (Bloomberg) -- Rubber advanced to the highest level in 16 months as a rally in global stocks raised speculation that the economic recovery may boost demand and as Thailand, Indonesia and Malaysia studied a plan to support prices.
Futures in Tokyo increased as much as 2.6 percent to the highest level since Sept. 10, 2008. Asian stocks gained after an Australian report showed employment rose three times more than economists forecast, spurring demand for riskier assets. The yen weakened against higher-yielding currencies, boosting contracts.
“The positive economic data boosted investor confidence in recovery, leading to purchases of industrial raw materials,” Hisaaki Tasaka, an analyst at Tokyo-based commodity broker ACE Koeki Co., said today by phone.
Rubber for June delivery gained as much as 7.8 yen to 304.4 yen per kilogram ($3,322 a metric ton) on the Tokyo Commodity Exchange before settling at 303.8 yen. The contract has gained about 10 percent this month.
The yen weakened after the Australian statistics bureau said the number of people employed rose 35,200 in December from November. The median estimate of economists surveyed by Bloomberg was for an increase of 10,000. The jobless rate fell to 5.5 percent from a revised 5.6 percent.
The MSCI Asia Pacific Index advanced 1.3 percent to 126.23 as of 3:39 p.m. in Tokyo. The gauge has surged 45 percent in the past year amid signs of recovery in the region’s economies, led by China.
Thai Shippers
Thailand, Indonesia and Malaysia, the world’s three biggest rubber producers, are drawing up a plan to support prices should they decline to less than $2,600 a metric ton and plan a ministerial meeting Jan. 19 in Kuala Lumpur.
Indonesia and Thailand have agreed in principle to the plan, which may involve buying and stockpiling rubber if it falls to less than level, according to Apichart Jongskul, secretary- general of Thailand’s Office of Agricultural Economics.
Thailand may miss output forecasts for rubber this year because of dry weather caused by an El Nino event, Apichart said yesterday. Production may be 3.1 million tons, compared with the 3.33 million estimated earlier, he said.
Thai rubber estates would be expanded by 1 million rai (395,369 acres) from 17 million rai between this year and 2012, Apichart said yesterday. The government plans to spend 11.4 billion baht ($346 million) on the program, he said.
Shippers in Thailand, the world’s largest exporter, have raised offers for RSS-3 grade rubber for February-March shipment to $3.10 a kilogram from $3.05 on Jan. 12, Tasaka said.
“Shippers raised offers as they expect Chinese buying will pick up before the New Year holiday,” he said. China’s Lunar New Year break will start Feb. 14 and last for a week.
Rubber for May delivery on the Shanghai Futures Exchange rose 1.1 percent to 25,725 yuan ($3,768) a ton at 2:48 p.m. local time. The contract advanced to 26,170 yuan on Jan. 11, the highest level since July 2008.