Tokyo Futures Rise On Firmness In Other Commodities

Tokyo Futures Rise On Firmness In Other Commodities
WEDNESDAY, MAY 25, 2011

Key Tokyo rubber futures rose on Wednesday (May 25), tracking other commodities higher, while market participants kept a close eye on Shanghai futures to gauge demand from China, the world's top consumer of rubber.
FUNDAMENTALS
The benchmark rubber contract on the Tokyo Commodity Exchange for October delivery rose 6.6 yen or 1.8 percent to 382.5 yen per kg as of 0019 GMT.
The May contract will expire later on Wednesday (May 25), and the benchmark will switch to November delivery from Thursday (May 26).
Some dealers have said they expect futures to rise after the price finished above resistance at 370 yen on Tuesday (May 24).
The most active contract on the Shanghai rubber market for September delivery rose 785 yuan to settle at 31,615 yuan ($4,860.174) per tonne on Tuesday (May 24).
Oil prices were lower in early Asia on Wednesday (May 25) after rising 2 percent the day before in choppy trading when Goldman Sachs raised its price forecasts for Brent crude, saying demand from economic growth will eat into stockpiles and OPEC spare capacity.
The euro rose against the dollar in early Asia on Wednesday (May 25) following a slight relief rally across most markets after Monday's (May 23) widespread sell-off. Investors are encouraged by Spain's successful short-term debt offering and better-than-expected data from Germany and the United States.
MARKET NEWS
Japan's exports fell 12.5 percent in April from a year earlier, pushing the country into its first trade deficit in three months, Ministry of Finance data showed on Wednesday (May 25), after the earthquake in March disrupted supply chains and hurt output.
The volume of Japan's customs-cleared crude oil imports fell 14.0 percent in April from the same month a year earlier, the Ministry of Finance said on Wednesday (May 25).
Federal Reserve officials on Tuesday (May 24) expressed confidence in the U.S. economic recovery despite high gas prices and European financial jitters, and one suggested the U.S. central bank could reverse its ultra-loose monetary policy this year.
JK Tyre and Industries is looking to acquire a rubber plantation to offset rising input costs that are eroding the tyre maker's profits, a top official said on Tuesday (May 24).
Japan's benchmark Nikkei stock average opened up 0.16 percent.
U.S. stocks dipped in light volume on Tuesday (May 24) as lingering concerns about a slowdown in growth more than offset gains in energy shares.
(Reuters, May 25, 2011)




Indonesia: Govt told to better fund rubber producers
WEDNESDAY, MAY 25, 2011

The government needs to better fund small plantations and improve planting policies to boost Indonesia’s rubber production, according to an international industry group.
Lekshmi Nairm a senior economist with the International Rubber Study Group, said on Monday that Indonesia’s rubber output per hectare was still far lower than other rubber producers in Southeast Asia, such as Malaysia and Thailand.
“If some level of capital assistance for small holdings is given through different government policies, as has already implemented in the cases of Thailand and Malaysia, then surely [local producers] can increase productivity and Indonesia can be a leading producer,” she said on the sidelines of the Asian Commodities and Derivatives Conference 2011 in Jakarta.
Lekshmi said that Indonesia also needed to improve implementation of its plantation revitalization scheme.
According to recent information from the Indonesian Rubber Association (Gapkindo), Indonesian plantations produce an average of 880 kilograms of rubber per hectare every year, or about half of output of plantations in Thailand or India, which can produce more than 1,500 kilograms.
Gapkindo executive director Suharto Honggokusumo said the government’s revitalization program had failed to help small plantations to raise output since the scheme’s implementation in 2007.
Small scale rubber plantations comprise 86 percent of Indonesia’s rubber plantations, while 14 percent are controlled by private and state-owned firms.
“Many farmers could not access the funds because most of them did not have the required land certificates as collateral,” he said.
The government revitalization program covered Indonesia’s three main commodities — oil palm, rubber and cacao.
Under the program, the government allocated Rp 4.4 trillion (US$514.8 billion) between 2007 and 2010 for interest-subsidized investment loans to be issued by seven state-owned banks, including Bank Mandiri and Bank Rakyat Indonesia.
The scheme was aimed at, among other things, opening 1.5 million hectares of new plantations, including 1.3 million hectares of oil palm plantations, 50,000 hectares of rubber plantations and 110,00 hectares of cacao plantations.
However, only 6,000 hectares of new rubber plantations have been opened under the program.
Suharto said the low productivity of Indonesian plantations could be partly attributed to the use of low-yield, poor quality clones and improper tapping and planting techniques.
“The problem lies in the poor education of our farmers and their poor purchasing power,” he said, adding that around 40 percent of rubber farmers still used poor quality clones.
Indonesia is currently the world’s second largest producer of natural rubber after Thailand. The nation’s rubber plantations, located principally in Sumatra, Java and Kalimantan, are slated to produce 3.08 million tons of rubber this year, up 8 percent from 2.85 million tons last year. World rubber production for 2011 has been estimated to top 10 million tons.




Vietnam Rubber Exports Forecast at 40,000 Tons in May
WEDNESDAY, MAY 25, 2011

Vietnam, the fourth-biggest rubber exporter in 2010, may ship 40,000 metric tons this month, according to figures today from the General Statistics Office in Hanoi.
The nation shipped 36,000 metric tons in April, 20 percent lower than a previous assessment of 45,000 tons, revised figures from the Statistics Office show. Exports in the first five months were 240,000 tons, up 31 percent from a year earlier.




Lack of buyers weakens spot rubber

KOTTAYAM, MAY 25:
Spot rubber weakened on Wednesday. The market continued to shed the gains as there were no positive signals to trigger an uptrend either from the domestic or international scene. There has been selling from dealers and growers but the trading volumes were low in the absence of quantity buyers on any grade.

Sheet rubber declined to Rs 217 (218) a kg according to traders. The grade slipped to Rs 217.50 (218.50) a kg both at Kottayam and Kochi, according to the Rubber Board.

The June series concluded the session at Rs 218.40 (218.87), July at Rs 221.65 (221.82), August at Rs 220.50 (220.85), September at Rs 217.08 (216.70), October at Rs 210 (212.25) and November at Rs 214 (211) a kg for RSS 4 on the National Multi Commodity Exchange.

The key Tokyo rubber futures bounced back in tune with other commodities, while market participants kept a close eye on Shanghai futures to assess the demand from China.

The May futures for RSS 3 expired at ¥408 (Rs 225.52) a kg while the June futures improved to ¥409 (Rs 226.03) from ¥403.5 during the day session and then to ¥414 (Rs 228.79) a kg in the night session on the Tokyo Commodity Exchange. RSS 3 (spot) closed at Rs 231.17 (230.25) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 217 (218); RSS-5: 214 (216); ungraded: 212 (213); ISNR 20: 209 (211) and latex 60 per cent: 130 (131).