- Producers to meet in Kuala Lumpur this week
- Benchmark global prices down 25% this year
SINGAPORE/KUALA LUMPUR (Reuters): Rubber producers in Asia are to meet later this week to look at more measures to push up prices, which are not far above five-year lows, including restrictions on supply to global markets, a source who will be part of the meeting said.
Last month rubber associations from Thailand to Cambodia urged producers not to sell the commodity below a minimum price of $1.50 per kg and top producer and exporter Thailand later approved a 58 billion baht ($1.8 billion) subsidy plan to support farmers.
Global prices have since recovered from their lowest levels since 2009, but the market remains depressed and many Asian farmers are abandoning tapping to look for other jobs.
Meeting in Kuala Lumpur on Nov. 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% of global natural rubber production.
â€śThe meeting will look at whatâ€™s the best measure rubber-producing countries can take to stabilise prices,â€ť said the source, who declined to be identified ahead of the plans being finalised.
â€śThere are three perspectives weâ€™ll be looking at â€“ reducing supply to global markets, reducing domestic supply or increasing domestic demand.â€ť
In 2012-13, the IRCo agreed to remove 300,000 tons, or 3% 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 address the issue of price volatility as well as â€śpossible cooperationâ€ť among producers to get a fair price level for natural rubber, Yium Tavarolit, head of the IRCo said on the organisationâ€™s website.
Benchmark Japanese rubber futures hit a five-year trough of 173.8 yen per kg in early October and although the price has recovered slightly, at 206 yen ($1.78) it is still down 25% this year.
â€śThe 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,â€ť said a trader in Singapore.