Rubber Output Forecast Revised Up to 10 Million Tons

Photos:By ATISH KUMAR JAIN 03.10.2011 at 13:00hrs
Location: Busy streets of Kottayam Town

Translation:
Photo 1 and 2:RUBBER WILL FETCH Rs.500.00
Photo 3 and 4:SELLING RUBBER BELOW RS.500.00 IS CRIME
Posters affixed by I.R.M.F.-Kochi





Rubber Output Forecast Revised Up to 10 Million Tons
October 3, 2011





Oct. 3 (Bloomberg) — Rubber production this year may gain more than previously estimated, boosted by increased output from China, Indonesia and Malaysia, according to the Association of Natural Rubber Producing Countries.

Production from its members, representing 92 percent of global supply, is projected to grow 5.6 percent to 10 million metric tons, the group said in a monthly bulletin today. It had earlier forecast a rise of 5 percent to 9.96 million tons.

“Although the supply shows a marginal improvement compared with what was previously assessed, concerns over availability of natural rubber still persist,” said Jom Jacob, a senior economist at the Kuala Lumpur-based association.

Rubber futures have lost 27 percent this year amid concerns that a slowing U.S. economy and deepening European debt crisis may curb demand for the commodity used for tires and gloves. “While the natural rubber market may continue to stay fragile in the short-term due to exogenous factors, the demand-supply situation can hold the price,” Jacob said.

Output growth in the third quarter was revised up to 6.1 percent from 3.3 percent earlier, according to the group.

Consumption in China, India and Malaysia, which account for 45 percent of the global demand, is likely to expand 2.7 percent in the third quarter, an improvement from a contraction of 1 percent and 4.2 percent in the previous two quarters, it said.






Market on Oct 3: Mixed trend in rubber
Written by HMH | October 3, 2011 | 0 |





KOTTAYAM, OCT. 3:
Physical rubber prices showed a mixed mood on Monday. The market opened weak but regained strength in major counters as domestic futures recovered the initial losses on late trades.

The overall sentiments were bearish, while the remaining grades including latex lost mainly on buyer resistance.

With peak production season on and climatic conditions improving, gains will be limited though the projected demand-supply deficit and falling inventories in warehouses might cushion a fall.

As China goes for a week-long holiday starting Monday, activities are expected to be dull during the week in the global scene.

Sheet rubber closed unchanged at Rs 209 a kg according to traders.

The grade dropped to Rs 208.50 (209.50) a kg both at Kottayam and Kochi as quoted by the Rubber Board.

RSS 4 improved at its October series to Rs 209.50 (208.82), November to Rs 205.70 (205.04), December to Rs 207.40 (206.36), January to Rs 208.50 (207.06) and February to Rs 209.55 (209) a kg on the National Multi Commodity Exchange. RSS 3 (spot) slipped to Rs 203.53 (207.33) a kg at Bangkok.

The October futures declined to ¥294 (Rs 188.15) from ¥301.8 a kg during the day session but then remained inactive in the night session on the Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 209 (209); RSS-5: 206 (206); ungraded: 197 (198); ISNR 20: 201 (203) and latex 60 per cent: 130.50 (131).





Thailand to cut rubber supply to prop up prices
Written by HMH | October 4, 2011 | 0 |





* Top producer to cut rubber supply by uprooting trees

* Some traders see small impact on prices from this

* Prices may recover due to fundamental factors this year (Adds details and comment)

By Apornrath Phoonphongphiphat

BANGKOK, Oct 4 (Reuters) – Thailand, the world’s biggest rubber producer and exporter, plans to cut annual rubber supply by 120,000 tonnes and will ask other major producers to take action to help prop up prices, senior government and industry officials said on Tuesday.

“We aim to cut rubber supply to push up prices by encouraging farmers to cut down and replant rubber trees on 400,000 rai (64,000 hectares), starting from now, and we would ask for cooperation from Indonesia and Malaysia to take similar action,” said Jirakorn Kosaisawe, director general of the Department of Agriculture.

That would equate to a drop of around 120,000 tonnes in output, said Pongsak Kerdvongbundit, president of the Thai Rubber Association.

Trees take up to seven years to mature and produce latex after planting.

Pongsak said the usual drop in supply during the upcoming dry season together with the replanting plan should stop the benchmark Thai rubber sheet (RSS3) falling below $4.0 per kg this year.

It stood at $4.1 on Tuesday, having fallen from a record $6.4 in February.

Jirakorn said the government would pay farmers 16,000 baht ($512) per rai (0.16 hectare), up from the current 11,000 baht, to encourage them to cut down ageing rubber trees.

“We already have the money collected on rubber exports, around 15 billion baht, so we can start the plan right away,” Jirakorn said, referring to the so called “cess money levy”.

The cess levy is money collected from exporters at progressive rates depending on the price. It goes into the Rubber Plantation Aid Fund, which pays farmers compensation to support them until their trees are mature.

Some traders were sceptical the plan would work. A similar measure was announced at the end of 2008, when the rubber price had fallen to its lowest in nearly seven years at $1.1 per kg.

“We’re getting used to this sort of measure and I don’t think it will have a big impact on prices. You can see that the top producers did not really impose the measure in 2009 and rubber prices rebounded finally because of fundamental factors, supply and demand,” said a trader in Thailand’s Hat Yai rubber centre.

In 2008, Thailand committed itself to cutting down and replanting rubber trees on 64,000 hectares to cut supply in 2009. Indonesia and Malaysia announced similar plans.

However, it eventually cut down only 16,000 hectares as prices had rebounded by mid-2009, meaning farmers preferred to keep on tapping rather than lose trees.

Traders said physical rubber prices could easily rally now due to the seasonal drop in supply in the final quarter and the prospect of strong demand in Asia.

($1 = 31.215 Thai Baht)





Thai Govt, Exporters Meet on Ways To Stabilise Rubber
Written by HMH | October 4, 2011 | 0 |





The Thai government is in an emergency meeting with exporters to look at ways of stabilising rubber prices, senior industry and government officials said on Tuesday (Oct 4).

Thailand is the world’s biggest producer and exporter of rubber. The price of its benchmark smoked rubber sheet has fallen around 35 percent to $4.1 per kg on Tuesday (Oct 4) from a record high of $6.4 per kg in February.

“We are trying to find some measures to prevent prices falling further,” said Pongsak Kerdvongbundit, president of the Thai Rubber Association told Reuters.

A senior government official said any measures that this meeting came up with would be implemented in Thailand only.

(Reuters, October 4, 2011)