TOP global rubber producers and exporters Thailand, Indonesia and Malaysia will be holding a meeting in May to discuss measures for minimise price discrepancies between shipments to help stabilise global rates.
The three countries account for 70% of the world’s total rubber output.
Pongsak Kerdvongbundit, Honorary President of the Thai Rubber Association divulged during an industry event held in Phuket that Indonesian supplies are currently US$0.30/kilogramme cheaper than those from Thailand; and US$0.15 cheaper than those from Malaysia, further exclaiming that the price gap is currently is too wide and unstable.
Pongsak suggested that an agreeable range should be set to avoid getting the tripartite to undercut each other on prices and lowering export income.
Rubber futures prices in Tokyo went into a bear market this month on signs that weak demand in China, the largest consumer, will expand a global glut.
Thailand, the largest rubber producer is keen at lowering shipments by 10% through end of May, Deputy Agriculture Minister Yuthapong Charassathien said.
“We had informal talks with Indonesian and Malaysian exporters and will further discuss at the next meeting of the Asean Rubber Business Council and during the Thai Rubber Association annual meeting, both in May.” Pongsak said.
Futures prices fell 0.2% to 276.4 yen/kilogramme (US$2,790/tonne) recently on the Tokyo Commodity Exchange.
Prices are down 8.6% this year after rallying 15% in 2012 when the three countries agreed to restrict shipments from October to March and cut down old trees. They set a goal to remove a total of 450,000 tonnes from the market after futures slumped to a three-year low last August.
Thai exporters have been buying rubber from Tokyo where prices are cheaper, said Mr Pongsak. “Purchases will continue as long as Tokyo prices are lower than those of Thailand.”
the Rubber Research Institute of Thailand, cited the latest figures in the Hat Yai central market wherein Thai rubber free-on-board climbed 1.2% to 83.25 baht/kilogramme.