Thailand continues to barge in the rubber market despite the fact that the prices of rubber have backfired it when the US Federal Reserve launched its new stimulus programme for the benefit of the US economy.
The Thai government has approved an increase in the budget of up to 30 billion baht (US$974.34mil) to buy more rubber from farmers to boost the price of natural rubber in the market.
Since the Fed unveiled its new stimulus plan, the prices of rubber have slightly bounced back.
The Fed has decided to buy US$40 billion worth of mortgage debt for a month until the jobs in the US improve.
Tokyo rubber futures prices, which set the global trend, rose to 259.5 yen per kg yesterday, the highest since July 4, on the back of the Fed’s stimulus move and the Thai intervention, dealers said.
The dealers also said that the prices of the natural rubber would remain to be strong in the coming days.
Besides this move by the Thai government, the increase is also anticipated as China, the biggest rubber buyer in the world, is likely to step in ahead on October.
a Singapore-based trader said that Chinese buyers are asking around as they want to seal deals before the National Holiday which may positively affect on the price.
Offer prices for benchmark grade Thai rubber sheet (RSS3) rose by around 35% to US$3.20US$3.25 per kg yesterday, up from this year’s low of around US$2.75 per kg, on the back of the government’s intervention and demand. It was traded at US$3.18 per kg, traders said.
“Major tyre makers resumed buying as they thought that the downward trend would end and prices could rise higher after QE3,” said a Singapore-based trader. (PRA)