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RUBBER NEWS INT'L: Natural Rubber prices remain low despite supply concerns
(Last Updated: 04 Dec 2017)

 

 

Natural Rubber prices remain low despite supply concerns

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 LONDON—Natural  prices remained weak in November, although a shortage of supply as a result of heavy rains was expected to push up the prices in global markets.

Natural Rubber prices remain low despite supply concerns

An ERJ analysis of Far East markets showed little change between closing prices during November, despite some signs of recovery at the beginning of the month.

On the , prices for RU1801, the most heavily traded NR future, stood at about $2,042 per ton on Nov. 30.

 

The  price was just slightly little below the $2,056 per ton recorded for RU1801 trades at the beginning of the month.

There were, though, some significant price movements during the month. Prices for the  future fell to $2,007 per ton on Nov. 16, before recovering to start-of-month levels.

Similarly, on Japan\’s TOCOM exchange, back-month prices for  materials continued to remain flat at $1.77 per kilogram on Nov. 30.

While a small pick-up was observed in Tokyo during the second week of November, prices hovered around the $1.69 per kilogram mark during the month of November.

In , spot prices for RSS1 grades on Nov. 30 stood at $160.4 per 100 kilograms, down 1 percent compared to the end of October.

RSS3 performed slightly weaker on the Thai exchange, posting a 5 percent decline at $156.9 per 100 kilograms, compared to $164.80 per 100 kilograms on Oct. 31.

In Kuala Lumpur, prices for SMR-20 inched 1 percent up, at $139.70 per 100 kilograms at the end of November, compared to $137.65 per 100 kilograms at the end of October.

Malaysian SMR-20 prices did rally up to $145.30 per 100 kilograms in the first week of the month, before tracking downward.

Latex performed better in Kuala Lumpur, closing nearly 7 percent up at $118.90 per 100 kilograms on Nov. 30, compared to $111.25 per 100 kilograms at the end of October.

 

 

Top Asian rubber producers to curb exports next month after price fall

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 By Patpicha Tanakasempipat and Panarat Thepgumpanat

BANGKOK, Nov 30 (Reuters) – Asia’s top  producers have agreed to cut exports of natural  from next month in a bid to address declining global prices.

The International Rubber Consortium (IRCo) announced the decision on Thursday after the International Tripartite Rubber Council (ITRC) – consisting of Thailand, Indonesia and  – met on Wednesday in Thailand’s northern capital of Chiang Mai to discuss concerns over falling prices even though oversupply has recently eased as bad weather hit production.

Thailand, Indonesia, and Malaysia produce nearly 70 percent of the world’s natural rubber.

 

“The three ITRC member countries will restrict exports of natural rubber for a specific timeframe with the objective of addressing the current declining trend on natural rubber prices,” IRCo said in a statement on Thursday.

The price of Thai benchmark RSS3 rubber <RUB-RSS3C-BKK> has fallen 47 percent since the end of January amid oversupply and slowing demand from China, the United States, and Japan, according to the Rubber Authority of Thailand.

Benchmark  rubber futures also hit a five-month low earlier this month.

The export cuts will start in the middle of December but IRCo did not specify the volume of export cuts or how long the scheme would last.

The council did agree on an initial volume but  cannot yet be revealed, as officials from each country will need to first seek approval from their respective ministries, a source at the Rubber Authority of Thailand told Reuters.

“The officials will meet again in Bangkok on Dec. 13 to finalize the volume. If they all agree, it will be announced on that day, and the measure will be implemented on Dec. 15,” the source said.

The measure is necessary ahead of forecast bad weather that will hurt , said Moenarji Soedargo, chairman of the Indonesian Rubber Association (Gapkindo).

“Because these days, it’s far too oversold, so that the price doesn’t reflect the  properly,” Soedargo told Reuters.

“AETS (Agreed Export Tonnage Scheme) is considered as the right measure to re-align the price,” he added, referring to the scheme’s official name.

This will be the fifth time since 2012 that the ITRC has agreed to implement the scheme to rescue falling prices.

(Reporting by Patpicha Tanakasempipat and Panarat Thepgumpanat in BANGKOK; Additional reporting by Bernadette Christina Munthe in JAKARTA; Editing by Susan Fenton)

 

Malaysia: Sabah To Introduce Rubberised Roads To Address Low Rubber Price

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KOTA KINABALU, Nov 22 (Bernama) — The Sabah government will introduce the use of rubber in paving roads and ‘green ’ as a long-term strategy to address the issue of low , said  Datuk Seri Yahya Hussin.

Yahya, who is also Sabah Agriculture and Food Industry Minister, said the move was also seen as potentially boosting rubber demand in the country as well as reducing exports to international markets, thereby shoring up flagging prices of the commodity in the future.

“The drop in rubber prices in the international market is due to the slowdown in world  growth and the government is very concerned with the situation as  affects the income of smallholders and rubber tappers,” he said in reply to a question from Datuk Joniston Bangkuai (BN-Kiulu) at the state assembly sitting here today.

He said the international  for rubber grade SMR 20 fell from RM9.53 per kilogramme in January 2017 to RM6.01 per kg in October.

 

Yahya said the state government was committed to addressing the issues faced by rubber smallholders in Sabah by allocating RM20 million in Budget 2018.

— BERNAMA

 

Thailand: Rubber farmers seek assistance from Prayut

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  farmers on Tuesday petitioned Prime Minister General Prayut Chan-o-cha for help in the face of falling  prices.

Thailand: Rubber farmers seek assistance from Prayut

Prime Minister General Prayut Chan-o-cha

One of the key demands in the petition is that the Rubber Authority of  pays Bt3,000 to each rubber tapper as social welfare during difficult times. 

Also, the authority is expected to work with the Natural Resources and Environment Ministry to help landless rubber farmers win the right to use land plots that have been designated as community land plots by the government.

 

Rubber farmers have also demanded that the government introduces a sustainable solution to  and that rubber farmers are involved in the process to resolve the problem. 

Sunthorn Rakrong, who heads two groups of rubber farmers, submitted a petition to Prayut via the government’s complaint-receiving centre at the Office of the Permanent Secretary for the ’s Office on Tuesday. 

– THE NATION

 

 

La Nina, Heavy Rains And Wintering Season Expected To Reduce Global Supply Of Natural Rubber

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 The  (IRCo) — comprising representatives from Thailand, Indonesia and Malaysia — has forecast a reduction in the supply of natural rubber (NR) for the global market amidst strong sentiments for its demand.

 cited the La Nina phenomenon which is expected to bring heavy rains from November 2017 to January 2018, affecting the production of NR as well as the rubber wintering season beginning in the last quarter of 2017 that is also expected to further reduce the supply of NR for the global market.

“Given the current supply and demand situation of NR, the prices are not reflective of market ,” said IRCo Chairman Mesah Tarigan along with all BoD members from IRCo.

IRCo said there are strong sentiments favouring the demand for NR such as an improved global  growth rate in 2017 which is projected at 3.6% compared to 3.2% in 2016 (based on IMF data of October 2017).

 

It also noted that the improvement of automobile sales in major markets i.e China, EU and Japan which grew by 4.8%, 3.7% and 7.1% respectively during the first three quarters of 2017 compared to corresponding period in 2016, which had a direct impact on the demand for NR for the production of . [source: European Automobile Manufacturers Association, China Association of Automobile Manufacturers (CAAM), Autodata Corporation, Reuters and Japanese Automobile Manufacturers Association (JAMA)].

In addition to that, we see better market situation for other commodities such as the strengthened crude oil prices and other commodities as indicated in  and GCSI Commodity Index.

Meanwhile, there is increasing usage of NR by Thailand, Indonesia and Malaysia for the construction of their roads and highways.

“The three Countries will collectively monitor and consider measures to strengthen NR prices, taking into account that the majority of rubber planted areas are managed by smallholders and any reduction in prices has a direct impact on their income and welfare,” said Mesah.

  • oilandgas360.com

 

Natural Rubber producers foresee rise in demand

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  – The International Rubber Consortium (IRCo), the operational arm of the International Tripartite Rubber Council (ITRC), has announced that it expects ‘La Nina’ natural phenomenon to hit South East  from November 2017 – January 2018 and bring heavy rains, affecting production of natural rubber in the region.

A meeting of IRCo board of directors on 3 Nov also heard that the natural phenomenon as well as the wintering season which is set to start in the final quarter of 2017, are expected to contribute to a reduction in supply of NR to the global markets.

The board, which consists of representatives from ITRC memebers Thailand, Indonesia and ,  concluded that with the current supply and demand sitution of NR, prices were “not reflective of market fundamentals”.

NR prices have declined sharply to $1.6/kg in Oct since a hike at the beginning of the year, which saw the figure rise to $2.5/kg.

 

In terms of demand, the IRCo meeting noted strong sentiment favouring demand for NR, including the projected world  growth rate of 3.6% in 2017, compared to 3.2% the year before.

Additionally, the meeting cited imporved automotive sales in major markets as another contributor to a rise in demand in the near future.

According to IRCo, the automotive markets in , EU and  grew year-on-year by 4.8%, 3.7% and 7.1% respectively during the first nine months of the year

 

 

Natural rubber now a critical raw material for EU

IRCO-rubber plantation-NR-3Brussels  – Natural rubber has been included on the EU’s ‘critical raw material list’, the European Tyre & Rubber Manufacturers’ Association (ETRMA) has reported.

Inclusion on the 2017 listing – valid for three years – means the EU has recognised the need “to ensure the secure, sustainable and affordable supply for the EU manufacturing industry.”

NR was the only biotic raw material among the 27 out of 61 candidate materials to pass the EU listing…

 

Malaysia: Rubber, Rubber Product Exports To Hit RM20 Bln Target, Says Ministry

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 KUALA LUMPUR — The Ministry of Plantation Industries and Commodities expects and  product exports to hit this year’s RM20 billion target due to buying support mainly from the US, , China and India.

 

 

Its Minister, Datuk Seri Mah Siew Keong, said between January and  2017, rubber and rubber product exports rose by 38.5 per cent to RM19.1 billion from RM13.8 billion during the same period last year.

In 2016, exports of rubber and rubber products stood at RM18.1 billion.

  

He said this was partly due to the decision by some importing countries to switch to natural rubber (latex/nitrile-based) gloves from vinyl gloves, noting that the former were produced in .

Mah said this to reporters after launching the Malaysian  Promotion Council (MREPC) Industry Linkage Fund (ILF), themed ‘Enhancing Competitiveness Through Research Collaboration’, here today.

He said the ILF was an effort to create a complete eco-system to support the development of the rubber products industry in terms of market promotion, research and development and human capital.

MREPC’s ILF started with an initial fund of RM3 million, to be awarded either as a full research fund or as a matching grant.

The full research grant would be awarded to projects which offer industry-wide solutions, while the matching grant would cater to specific projects that would benefit individual companies, especially small and medium enterprises.

Meanwhile, Mah said, for the coming budget, his ministry had sent a proposal to the government to extend the reinvestment allowance for manufacturers beyond 2018.

“We hope  will be extended as the manufacturers have long-term plans for their businesses, and they need some time to implement them,” he said.

Previously, under the 2016 Budget, the government had accorded reinvestment allowance of up to 60 per cent of the allowed capital expenditure for manufacturers for the 2016-2018 period.

— BERNAMA

 

Thai Rubber Development Plan for the Next 20-year Is on the Way

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On September 9, Director of Rubber Authority of Thailand (RAOT) said that the RAOT would conduct a final review of a draft for the 20-year Thailand  development. If the draft is passed,  will become the first Thai national rubber development plan. Thus, the rubber consumption in Thailand may be stimulated, and the rubber farmers’ income will be improved.

The 20-year Thai national rubber development plan sets the prospect of the rubber industry development, which is that Thailand will become the world’s largest country in rubber planting, processing and exporting. Thailand wants to purse a decisive role and authorities in the international . Besides, the rubber consumption volume in Thailand will take 30% of the total rubber output, and the current proportion is 14%. The annual export value of both rubber feedstock and  will reach 800 billion THB. The foreign investment value attracted to the  industry will reach 2 billion USD per year.

The 20-year Thai national rubber development plan can be divided into four stages, and every stage contains five years. In the first stage of plan, the key objective is to improve the rubber output and the production efficiency. In the second stage of the plan, the goal is to develop and explore both the Thailand and international rubber markets. In the third stage, innovation and research in the rubber related industry needs to be promoted with great effort. In the last stage, the aim set in the national rubber development plan is to improve the management capabilities in the all-round rubber industry. Make Thailand become the world’s largest country in rubber planting, processing and exporting is the final target in the plan.

The draft of the plan includes 5 strategies and 19 tactics, mainly for stimulating the rubber consumption volume in Thailand, improving the , strengthening rubber farmers’ operation, and cultivating Smart Farmers. By cooperating with the international research institutes, the Thai rubber players can strengthen scientific innovation and develop high value-added products.

  • Source: sci99.com

 

 

Indonesia: Rubber farmers cry for help

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The government should look seriously into the grievances of rubber farmers who have been complaining about low prices over the last five years. True, the price of rubber, like most other commodities, such as palm , cacao and coal, is mainly influenced by global supply and demand, especially for 

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