SINGAPORE, Nov 13 — Rubber producers in Asia are to meet next week to look at more measures to push up prices, which are not far above five-year lows. The measures could include restrictions on supply, a source who will be part of the meeting said.
Last month associations representing producers from Thailand to Cambodia urged producers not to sell the commodity below a minimum price of US$1.50 per kg. Top producer and exporter Thailand later approved a 58 billion baht (RM5.9 billion) subsidy plan to support farmers.
Global prices have since recovered from their lowest levels since 2009, but the market remains depressed, and many smallholders are abandoning tapping to look for other jobs.
Meeting in Kuala Lumpur on November 20 are ministers from Thailand, Malaysia and Indonesia, which form the International Rubber Consortium (IRCo). Officials from Cambodia, Laos, Myanmar and Vietnam will also attend.
Together, the seven countries account for 77 per cent of global natural rubber production.
“The meeting will look at what’s the best measure rubber-producing countries can take to stabilise prices,” said the source, who declined to be identified ahead of the plans being finalised.
“There are three perspectives we’ll be looking at — reducing supply to global markets, reducing domestic supply or increasing domestic demand.”
In 2012-13, the IRCo agreed to remove 300,000 tonnes, or 3 per cent of 2012 global output, from the export market. However, the intervention only briefly supported prices, and Indonesia publicly called for the pact to be discontinued.
The meeting will discuss measures to deal with price volatility as well as “possible cooperation” to get a fair price level, Yium Tavarolit, head of the IRCo, said on the organisation’s website.
Benchmark Japanese rubber futures hit a five-year trough of ¥173.8 per kg in early October and although the price has recovered slightly, at ¥206 it is still down 25 per cent this year.
“The fact that the rubber producers are gathering does show some solidarity and cooperation and even if it does not translate to concrete action, it should be positive for the market,” said a trader in Singapore. — Reuters
