Rubber Fluctuates as Stronger Yen Cuts Appeal, Rain Caps Supply

Rubber Fluctuates as Stronger Yen Cuts Appeal, Rain Caps Supply
Posted: 07 Jul 2010 12:05 AM PDT
By Aya Takada

July 7 (Bloomberg) -- Rubber fluctuated as the Japanese currency advanced against the dollar, paring the appeal of yen- based contracts, and rain disrupted output in Thailand, limiting supply from the world’s largest exporter.

Futures gave up gains of as much as 1.5 percent as Asian stocks dropped after American service industries expanded at a slower pace than expected. The dollar traded near a seven-month low against the yen on speculation a Federal Reserve official speaking today will stress the need to keep interest rates near zero amid signs the U.S. recovery is slowing.

“The weak economic data from the U.S. sapped investor appetite for the futures,” said Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co.

The December-delivery contract lost 0.1 yen to 268 yen per kilogram ($3,063 a metric ton) at 11:47 a.m. local time on the Tokyo Commodity Exchange after moving between 267.3 yen and 272.2 yen.

The dollar traded at 87.49 yen as of 12:03 p.m. in Tokyo from 87.52 yen in New York yesterday, after falling to 86.97 on July 1, the lowest level since Dec. 2. The MSCI Asia Pacific Index lost 0.8 percent to 112.93, the first drop in three days.

The benchmark price in Thailand was unchanged yesterday at 112.60 baht ($3.47) a kilogram, according to the Rubber Institute of Thailand, which issues new data in the afternoon.

Tight global supplies and strong demand, especially from China, will support prices, the Association of Natural-Rubber- Producing Countries said in its June newsletter. China’s gross imports of natural rubber is projected to climb 5 percent this year to 1.67 million tons, the group said.

The possibility of a “marked improvement” in supply in the short term is limited given aging trees and weather constraints, the association said June 30. Rain in southern Thailand has disrupted plantation work in the major-growing region, according to the institute.

November-delivery rubber on the Shanghai Futures Exchange added 0.9 percent to 21,710 yuan ($3,203) a ton at 11:11 a.m. local time.

(bloomberg.com)





Thai Rubber, Sugar Output to Gain on Planting, Apichart Says
Posted: 07 Jul 2010 12:05 AM PDT
By Supunnabul Suwannakij

July 7 (Bloomberg) -- Damage from drought to Thai sugar, rubber and rice production will probably be limited as an increase in planting more than offsets losses from parched trees and plants, according to the Office of Agricultural Economics.

Cane output may gain 2.7 percent to 70.6 million metric tons in the year from November, while natural-rubber production may rise 2.3 percent to 3.1 million tons, Apichart Jongskul, the office’s secretary-general, said in an interview. Both the minor and main rice crops may drop, Apichart said yesterday by phone.

Thailand is the world’s biggest exporter of rice, the most important foodstuff in Asia. The kingdom is also the world’s leading rubber producer, and second-largest sugar exporter. Drought spread across 44 provinces, nearly 60 percent of the snation, with damage estimated at about 14 billion baht ($432 million), farm minister Theera Wongsamut said last month.

“Damage has been mitigated as farmers increased planting following attractive prices,” said Apichart. Rice prices may face “downward pressure” from December as the delayed main harvest starts to come onto the market, he said.

Thai 100 percent grade-B white rice, the benchmark for Asia, touched $469 a ton on June 9, the lowest level in at least two years, according to data from the Thai Rice Exporters Association. Rice futures in Chicago have tumbled 34 percent this year and traded yesterday at $9.90 per 100 pounds.

El Nino, La Nina

Drought linked to the El Nino weather pattern affected a swathe of Asia in the first half, damaging crops from China to Southeast Asia. Still, forecasters have said there may be a shift to wetter-than-usual conditions in the months ahead as a La Nina takes hold. Thailand’s Meteorological Department has said there may be heavy rain and floods in September and October.

The “drought damaged cane crops but farmers replanted, offsetting the decline,” Apichart said. The area planted to sugar cane increased 4 percent to 6.56 million rai (2.6 million acres), he said.

“Drought lowered latex output and trees in some areas are still young, generating low yields,” Apichart said, referring to the sap. The area planted to rubber has increased 12 percent to 12.1 million rai (4.8 million acres), Apichart said.

The minor rice harvest of unmilled grain that began in April and accounts for about 25 percent of annual output may fall 1.9 percent from the previous crop year to 8.26 million tons, he said. That’s less than an earlier forecast for more than 9 million tons, Apichart said.

Production of main-crop rice, planting of which has been delayed since May, will probably decline by 0.9 percent to 23 million tons, he said.

Concepcion Calpe, a senior economist at the United Nations’ Food and Agriculture Organization, said on June 29 that production of Thailand’s main rice crop may be 22 million tons in the year from October, the smallest since 2002.

The main Thai rice crop is usually planted in May, with harvesting from October. The government advised farmers on June 23 to postpone planting for a second time to the end of July because of delayed rains.

(bloomberg.com)





User industries demand duty-free rubber imports
Posted: 07 Jul 2010 12:03 AM PDT
Traders and user-industries of natural rubber say there is a strong case for allowing its duty-free import, given the steep rise in demand from tyre companies.

The Rubber Board, they complain, is yet to acknowledge that its earlier projections on consumption and stocks have been overtaken by market reality.

The Board had estimated an excess of consumption over production of 85,000 tonnes by the end of 2010-11, assuming a growth rate of nine per cent in production and six per cent in consumption.

However, contend user-industries, especially in the small and medium sector, consumption in the April-June quarter rose by 5.2 per cent to 230,000 tonnes, while production went up only 4.1 per cent, to 166,000 tonnes. The trend, they say, points to a shortfall by year-end of at least double the Board’s estimate, with a likely double-digit growth in consumption, led by the automobile tyre industry.

Rajiv Budhraja, director-general of the Automotive Tyre Manufacturers Association (Atma), estimates total consumption of rubber in India over the year would exceed production by 176,000 tonnes. Unlike the Board’s estimate of a six per cent rise in consumption, Atma, he told Business Standard, expects one of 12/15 per cent. The Board’s demand projections were very conservative, while production figures were optimistic, he said; it would probably happen the reverse way.

N Radhakrishnan, former president of the Cochin Rubber Merchants Association, said average monthly consumption rubber was likely to be 80,000 tonnes this year, leading to 960,000 tonnes of annual consumption, compared to production of about 850,000 tonnes.

One outcome, say user-industries, has been a sharp rise in rubber prices in the local markets. Imports aren’t filling the gap adequately: that in June, for instance, was 9,255 tonnes as against 20,258 tonnes during the same month last year.

While a steep rise in demand and prices for natural rubber would benefit the million-odd growers, there are also five million workers in the 5,000-odd rubber based user-industries in the country. The case for allowing duty-free imports, for at least a while, is strong, contend the critics.

A related demand is for the Rubber Board to improve the way it estimates demand and stocks. The Board says the stock as of end-June in the country was 216,554 tonnes, as against 186,435 tonnes at the same time last year.

(business-standard.com)





Spot rubber shows mixed trend
Posted: 07 Jul 2010 12:03 AM PDT
On Tuesday (06 July 2010), the spot rubber prices showed a mixed trend. The market was under pressure as the buyers stayed away from most of the grades but sheet rubber ended unchanged at Rs 182.50 per kg for the third consecutive day amidst dull volumes.

The July futures for RSS 4 ended at Rs 185.30 (185.50), August at Rs 176.24 (175.24), September at Rs 167.50 (166.63) and October to Rs 162.01 (162.79) per kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 182.50 (182.50); RSS-5: 177 (178); ungraded: 174.50 (176); ISNR 20: 160 (160) and latex 60 per cent: 127 (127).

(indiainfoline.com)


Sheet rubber prices slip
Aravindan

Kottayam, July 7

Spot rubber prices continued to witness a mixed trend on Wednesday. There were no fresh incentives to keep the market live as the domestic futures were almost steady. Sheet rubber lost its initial strength during closing hours and slipped to Rs 182 from Rs 182.50 a kg amidst scattered transactions.

Futures slip

The July series slipped to Rs 185.21 (185.24), while the August series firmed up to Rs 178.60 (176.24), September to Rs 170 (167.50) and October to Rs 163.60 (162.01) a kg for RSS 4 on the National Multi Commodity Exchange (NMCE). RSS 3 improved with the July futures rising to ¥350.8\Rs 189.21 (¥344.4), August to ¥313.6 (¥313.0), September to ¥301.6 (¥299.7), October to ¥282.4 (¥279.1), November to ¥273.8 (¥271.1) and December to ¥270.1(¥268.1) a kg during the day session on the Tokyo Commodity Exchange. The July futures weakened to ¥347.7 (Rs 187.53), August to ¥312.1, September to ¥300, October to ¥281.4, November to ¥271.8 and December to ¥267.6 a kg during the night session. RSS 3 (spot) moved up marginally to Rs 162.80 (162.53) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 182 (182.50); RSS-5: 177.50 (177); ungraded: 175 (174.50); ISNR 20: 159.50 (160) and latex 60 per cent: 127 (127).