Asian rubber futures settled higher Friday on supply concerns as heavy rains lashed Thailand and it was forecast that tight availability will continue for another two years.
Physical prices of USS3 grade raw material in the central markets of Thailand moved toward THB75 a kilogram again due to strong demand from rubber factories.
Tocom's benchmark April RSS3 contract settled Y2.6 higher at Y230.4/kg.
Prices were close to unchanged during the night session and the April contract ended at Y230.2/kg. Night session prices aren't included in intraday trading.
This year in Thailand, production is likely to fall to a multiyear low between 2 million and 2.5 million tons due to heavy rains, Department of Agriculture Director-General Somchai Charnnarongkul said earlier this week during a conference in Ho Chi Minh City.
Thailand's natural rubber production totaled 3 million tons in 2008.
Government and industry officials from Asia and around the world have gathered in Ho Chi Minh City for a six-day meeting organized by the Association of Natural Rubber Producing Countries, or ANRPC, to chart a course for the next year.
Officials from Thailand, Indonesia, Malaysia and India all have reported a decline in output this year due to adverse weather, including prolonged dryness, heavy rains and floods.
The global industry is at a low point in the rubber production cycle, as there was a large-scale replanting during 2005-2009 and these trees will begin to produce rubber only from 2012.
Feedback from member countries indicates total production is likely to be at least 6% lower this year, said ANRPC senior economist Jom Jacob. Natural rubber production was around 9.9 million metric tons in 2008.
In 2010 and 2011, production may hover between 9 million and 9.5 million tons, ANRPC Secretary General Djoko Damardjati said.
The benchmark January contract on the Shanghai Futures Exchange settled CNY105 higher at CNY19,070/ton. China is the world's largest consumer of rubber by volume.
China's rubber stocks have almost trebled in the last four and a half months and continue to rise. As of Thursday, they were estimated at 120,697 tons in warehouses tracked by the Shanghai Futures Exchange.
On the Agricultural Futures Exchange of Thailand, the benchmark June RSS3 contract settled THB0.75 higher at THB80.65/kg.
Asian physical rubber prices were higher due to the movement of trucks getting affected in Thailand due to heavy rains. Demand is quite good, particularly in Europe, the U.S. and Japan, said an exporter in Singapore.
(Source: irco.biz)
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