Southeast Asian rubber trade affected by currencies<\/p>\n
SINGAPORE (Reuter): The Southeast Asian rubber market will
\ntake its cue from the region's wobbly financial markets this
\nweek, especially after regional currencies fell to fresh record
\nlows, traders said yesterday.<\/p>\n
But buying is seen remaining weak since most of the major
\nconsumers have locked in their coverage and will not have to
\nenter the market over the next few weeks, they said.<\/p>\n
"People are still talking about the haze, drought and other
\nrelated things. But currency is the main issue," a dealer in
\nIndonesia said.<\/p>\n
"The regional trade will be dominated by the state of the
\ncurrency market," said a dealer in Singapore.<\/p>\n
Indonesian dealers said prices of the benchmark SIR20 rubber
\nshould be stable with the trade focused on the next move of the
\nrupiah.<\/p>\n
"The rupiah movement will be the issue for this week." a
\ntrader said. "The fall in the rupiah has made export prices
\nbecome more and more competitive. Demand is still slow in
\ngeneral, but there is always a chance prices will rise again
\nbecause (local) supply is tight."<\/p>\n
Traders said SIR20 finished the week at 41.00 U.S. cents a kg
\nFOB Palembang and Medan for November shipment, 40.75 cents FOB
\nPadang, 40.50 cents FOB Jambi and 40.25 cents FOB Pontianak.<\/p>\n
In Malaysia, all eyes are on the ringgit, especially after it
\nfell to record low of 3.4080 to the dollar last Wednesday,
\nsparking a sharp rise in rubber prices.<\/p>\n
"Everything is going on the currency now," a rubber trader in
\nKuala Lumpur said. "Some are saying it's going to reach 3.50."<\/p>\n
The Malaysian Rubber Exchange and Licensing Board quoted the
\nNovember RSS1 buyer at 290.50 Malaysian cents a kg at the close
\nof trade last Friday. November SMR20 buyer was seen at 288.50
\ncents. Both rubber grades rose by 21 cents through last week.<\/p>\n
Traders said although Malaysian prices were inflated, they
\nwere still competitive in the region.<\/p>\n
"On the average, we are still cheaper than Indonesia, so I
\nreckon we are still not too far spaced out," said a trader.<\/p>\n
Concerns over the jittery financial markets and the impact of
\nsmog shrouding most of the region appear to have eased in
\nThailand as players turned their attention to the level of stocks
\nin Japan, dealers said.<\/p>\n
"The baht seemed to withstand the regional pressure quite well
\nthis week. Its fall was rather limited and it moved in a narrow
\nrange. It might be in the process of stabilizing," said a trader
\nin the rubber center of Hat Yai.<\/p>\n
Thai RSS3 was quoted at 95.00-96.00 U.S. cents a kg FOB
\nBangkok for January\/February shipment and 90.00 cents on the same
\nbasis for November shipment.<\/p>\n
Traders in Jakarta and Bangkok said supplies may increase as
\nmore rains fall in drought-stricken Sumatra island while rubber
\ntappers in Thailand returned to work after a local holiday.<\/p>\n
Malaysian dealers said the supply of latex and other materials
\nlikewise remained ample with no immediate impact seen from the
\ndrought spawned by the El Nino weather anomaly or the smog from
\nforest fires in neighboring Indonesia.<\/p>\n
Singapore-based dealers said increased supplies may be bad
\nnews for the market.<\/p>\n
"Most of the consumers have already bought some coverage. I'd
\nbe cautious in this market," one said.<\/p>\n
"Offtake has been pretty weak," another trader said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/southeast-asian-rubber-trade-affected-by-currencies-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }