INRO considers rubber market intervention<\/p>\n
SINGAPORE (Dow Jones): The International Natural Rubber
\nOrganization has inquired about buying rubber from dealers,
\nexporters and producers in Asia, after the rubber group's five-
\nday Daily Market Indicator Price breached the \"may buy\"
\nintervention level, rubber traders told Dow Jones Newswires
\nyesterday.<\/p>\n
INRO's five-day DMIP average stands at 182.44 at present,
\nbelow the 183.00 \"may buy\" level.<\/p>\n
The DMIP is based on INRO's reference price and denominated in
\na composite index of Malaysian ringgit and Singapore dollar. If
\nthe five-day DMIP average breaches the \"may buy\" level, INRO may,
\nbut is not obliged to, buy rubber in the market.<\/p>\n
INRO has asked for offers for September and October shipments
\nfor the following grades: ribbed smoked sheet 1, ribbed smoked
\nsheet 3, and technically specified rubber 20, said a Tokyo-based
\nbroker with a large Japanese brokerage.<\/p>\n
Exporters and producers in Thailand, Indonesia and Malaysia,
\nthe world's top three natural rubber producing countries, also
\nconfirmed that they've received inquiries from INRO early
\nyesterday. INRO officials weren't available for comment.<\/p>\n
Although some market participants are \"betting on\" the
\npossibility of an INRO intervention, a large number of rubber
\ntraders and brokers are far from convinced that INRO's latest
\ninquiries suggest a real buy buffer stock operation.<\/p>\n
\"I think making such inquiries is more political than
\neconomic,\" said a Tokyo-based broker with another large Japanese
\nbrokerage. \"It's a gesture to the ANRPC meeting.\"<\/p>\n
In Bangkok Aug. 19-21, the Association of Natural Rubber
\nProducing Countries is scheduled to hold a special meeting to
\ndiscuss, among other things, Malaysia's decision to quit INRO.<\/p>\n
Thailand has threatened to do the same. Both countries have
\ncomplained that INRO has recently given scant support to weak
\nrubber markets.<\/p>\n
\"INRO is trying to soothe Malaysia and Thailand, while
\nencouraging Indonesia (not to quit INRO). But I don't think they
\nwill buy seriously,\" said the second Tokyo broker.<\/p>\n
The Kuala Lumpur-based ANRPC groups eight natural rubber
\nproducers.<\/p>\n
INRO isn't likely to launch a substantial intervention soon,
\nbecause it doesn't have \"much money\" right now, said the first
\nTokyo broker.<\/p>\n
INRO currently has around 100 million Malaysian ringgit set
\naside for any potential market intervention, according to INRO
\nofficials.<\/p>\n
It would be foolish to take the INRO inquiries as bullish
\nnews, he said, because even if INRO steps in, the long-term
\noutlook for the commodity will still be characterized as being
\noversupplied.<\/p>\n
\"It's still a bearish market in the long run,\" he said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/inro-considers-rubber-market-intervention-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }