Market and product

Thailand, Indonesia and Malaysia,representing about 70 percent of global natural-rubber supply,agreed steps to boost prices, said Yium Tavarolit, chiefsecretary of the International Rubber Consortium Ltd.

The measures will be announced by ministers tomorrow, saidYium, who declined to give details. Global supply and demand fornatural rubber is in balance, with no surplus, he said in aninterview after a one-day meeting in Bangkok. State agenciesfrom the three countries and an exporter representative fromThailand participated.

Rubber plunged 43 percent in the past year and reached thelowest in almost three years as growth slowed in China, the topconsumer, and Europe. Demand in China may drop 5 percent thisyear as declining truck sales cut tire use, Hangzhou ZhongceRubber Co., the biggest tiremaker, said last month. The threeproducers cut exports by 690,000 metric tons from January toJuly 2009 to combat a 56 percent decline in prices a yearearlier. Rubber surged 103 percent in 2009.

The steps “will have a positive outcome, moving priceshigher,” said Yium. China’s imports are still growing, he said.The International Rubber Consortium is an arm of theInternational Tripartite Rubber Council, which representsgrowers and exporters from the three countries.

January-delivery rubber gained 0.9 percent to close at209.5 yen a kilogram ($2,654 a metric ton) on the TokyoCommodity Exchange after settling yesterday at the lowest levelfor the most-active contract since October 2009.

Building Stockpiles

Thailand, the top shipper, may raise the budget to buyrubber sheets from local farmers above market rates from thecurrent allocation of 15 billion baht ($476 million) andincrease locations for purchases to cover all growing regions,Deputy Farm Minister Nattawut Saikuar said earlier. The planwill be presented for cabinet approval on Aug. 21, he said.

While Thailand is building inventories and cutting agingtrees, local rates have fallen 33 percent from this year’s peakto the lowest level since November 2009. The country announcedin May plans to buy more than 10,000 tons in Tokyo and Shanghaito boost prices.

Global natural-rubber consumption may rise 2.5 percent to11.2 million tons in 2012 as output grows 3.2 percent to 11.3million tons, the International Rubber Study Group said lastmonth. Demand may climb 4.3 percent to 11.7 million tons nextyear as production gains 4.4 percent to 11.8 million tons.