Rubber prices attributed to increased production in Thailand and Malaysia

Market participants said Thursday that Thailand and Malaysia due to the pressure on the weakened storm, natural rubber production in Southeast Asia in recent months since being abnormally low level of rebound. They said this would further drag down prices, as a result of new supply available. However, the global supply is still tight, Thailand's south-west of rubber growing areas are still some rain in southern Sumatra, Indonesia has entered a generally low-yield year period, that is, until 8 at the end of the winter. But now, traders in the near future will be rubber spot and futures prices attributed to increased production in Thailand and Malaysia.

Tokyo Commodity Exchange (Tocom) 3 level indicators of tobacco film contract since early July has dropped 30 yen, closing Thursday at 277.8 yen / kg or so. Spot market, Hat Yai rubber market in the central region of Thailand USS3 rubber offer Thursday 81.8 baht / kg higher than the level in early fall 16.4 percent. Tocom contracts in recent months reflect the decreased supply growth, Tocom important participants - Mitsui Bussan Futures chief researcher Emori Tetsu said.

Traders said that despite the increase in production partly because of the rain is smaller, but also because of farmers and stock broker the release of Chen. Thailand might not reach the price of 100 baht / kg expected to release an inventory storage. "USS3 supply rebound to normal levels may be the main reason for farmers to give up the 100 baht / kg price expectations, so they decided to sell the cargo," Trang Province, a leading producer of Unimac Rubber vice Shimasaki Noboru said. However, some brokers doubt the market exaggerated the impact of supply growth. "Some owners of Thailand is trying to spread through the news so that the prices of raw materials become cheaper," a Japanese trading company, senior trader said. "The market trend is not based on fundamentals. It is the reference signal technology."

Although the short-term supply growth will be almost no doubt, but Thailand as a whole will not exceed last year's output level. Thailand's Rubber Research Institute, said an official, even though the weather in some provinces, "normal", but Surathani province in the south are facing floods and heavy rain still allow other south-western province of Trang, and farmers can not tapping activities. Officials pointed out that the size of the Thai rubber output is still unknown, but the January to June period the volume of exports declined by 4.62 percent, to 1,043,000 tons. Thai rubber exports account for about 90% of the production. This augurs well for Thailand as a whole and rubber production last year, compared to only fair, even after half a year has become the ideal weather.

But the situation is very different from Malaysia, despite the heavy rain and floods there, but the production has grown dramatically. A few days ago traders also described Malaysia as a tight supply situation, but now has changed the view that production of "almost normal level." Malaysia Rubber Board released statistics show that production was significantly higher than last year's level. The most recent available statistics for the month of May is a production increase of 11%. Jan-month period -5 Malaysian rubber production increased by almost 20%, mainly due to more farmers have begun tapping. According to the Malaysian Rubber Industry Small Farmers Development Council officials said that a production increase is not significant.