Thailand, Indonesia and Malaysia — the world’s three biggest rubber producers — are drawing up a plan to support prices if they decline to less than $2,600 a metric ton.
Thailand and Indonesia have agreed in principle to the measures, which may involve buying and stockpiling rubber, according to Apichart Jongskul, secretary-general of Thailand’s Office of Agricultural Economics.
Rubber futures climbed to a 16-month high of 304.4 yen ($3.31) per kilogram ($3,322 a metric ton) on Thursday in trading on the Tokyo Commodity Exchange.
Prices fell to 99.8 yen in December 2008, the lowest level since August 2002, as the global financial crisis squeezed demand for tires. The three countries harvest about 7 million tons a year, 70 percent of world output of natural rubber.
“The plan is essential to prevent any decline in prices when the supply level increases or demand falls,” said Rewat Yenchai an analyst at Agrow Enterprise in Bangkok. “If the measure is imposed, we will not see the price fall lower than levels seen in late 2008.”
Last year, the three countries put on hold plans to curb exports as the global economic recovery boosted prices and demand, the International Rubber Consortium, which represents growers and exporters in the three countries, said on Oct. 27.
Agriculture ministers from the three countries will meet on Tuesday in Kuala Lumpur to discuss the plan and may invite Vietnam to join, Apichart said late on Wednesday.
(Bloomberg)
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