Unrelieved woes hits SE Asia rubber trade<\/p>\n
SINGAPORE (Reuter): Anemic regional currencies and the
\ndaunting prospect Bangkok may sell-off its excess rubber stocks
\nwill keep the rubber trade in Southeast Asia mired in a bearish
\nrut, traders said yesterday.<\/p>\n
\"Where's the good news? The market is teetering on a
\nprecipice,\" a senior dealer for a commodity house in Singapore
\ntold Reuters. \"It looks very weak.\"<\/p>\n
\"The currency situation is unambiguously bearish. The
\ndevaluation of the Thai baht unleashed a wave of selling. Now,
\nthe Indonesians are very keen sellers\" after the flotation of the
\nrupiah last week, he added.<\/p>\n
The Malaysian ringgit has also taken a hit, completing the
\nheadcount of currencies of the world's biggest natural rubber
\nproducers which have been savaged by speculative attacks.<\/p>\n
Combined with poor demand and fresh fears the Thai government
\nwill be forced to sell some of its 70,000 tons in rubber stocks,
\ndespite Bangkok's repeated denials it has any such plans,
\nregional prices are in for another rough week.<\/p>\n
\"We are not happy about this at all,\" a trader from Thailand
\nsaid. \"I expect the price to move in a narrow range with a
\ndownward bias this week.\"<\/p>\n
\"The market seems convinced that the government is considering
\nselling the stock. It could be just a matter of time,\" said a
\ntrader in the Thai rubber center of Hat Yai.<\/p>\n
A trader in Singapore said talk of Thai stock sales \"will
\nhaunt the market\" this week.<\/p>\n
\"I'm sure they will eventually sell some of the stock and that
\nwould be bad for the market,\" the dealer said.<\/p>\n
Thai dealers said Michelin and Marubeni of Japan bought modest
\namounts of RSS3 rubber last week, but China was absent.<\/p>\n
The Thai benchmark RSS3 was indicated around 91.00-92.00 U.S.
\ncents a kg FOB Bangkok for October shipment and 93.50 cents for
\nJanuary shipment on Friday.<\/p>\n
In Indonesia, dealers moaned at the rupiah's troubles and
\nscrambled for buyers who have practically disappeared.<\/p>\n
\"This market has been very gloomy. First, demand was very
\nweak, and now the rupiah is in trouble. Buyers have anticipated
\nprices will decline,\" said one trader in Palembang, Sumatra.<\/p>\n
\"Dealers are taking a wait-and-see position to await further
\ndevelopments in the currency market,\" said another trader. \"We
\nexpect to see a clearer picture on what the currency is going to
\nbe this week. We also expect the market to be weak,\" he added.<\/p>\n
Prices in Indonesia ended the week at 42.00 U.S. cents\/lb FOB
\nPalembang for October shipment and at 42.25 cents FOB Medan.<\/p>\n
Offer prices were quoted at 43.00 cents FOB Medan for November
\nshipment, 41.50 cents FOB Padang, Pontianak and Jambi for
\nSeptember shipment and 42.00 cents FOB Surabaya.<\/p>\n
Some traders said they believe buyers would enter the market
\nwhen prices drop to 40.00 U.S. cents.<\/p>\n
\"I think that...is a kind of resistance level in which buyers
\nwill have no choice but to buy rubber,\" said one trader.<\/p>\n
In Malaysia, traders said local prices were held hostage to
\nthe volatility of the ringgit and the rupiah.<\/p>\n
\"We don't know what's happening with the ringgit or rupiah and
\nI don't think our clients know very much either,\" said a trader
\nin Kuala Lumpur.<\/p>\n
He added: \"Technically, the prices should adjust upwards this
\nweek if the ringgit falls again. But then again it might not.\"<\/p>\n
Another trader said Malaysian rubber was among the most
\nattractively priced in the region now after the recent fall of
\nthe ringgit.<\/p>\n
\"We have had some steady buying in the last couple of weeks
\nfrom Australians and Koreans, among others,\" said the trader.
\n\"The volumes aren't great but it shows we are competitive.\"<\/p>\n
Traders said the lower the currency, the greater the
\nadvantages were for Malaysian commodity exporters.<\/p>\n
The benchmark RSS1 rubber for September buyer was priced at
\n250.50 Malaysian cents a kg at the close of the market last week,
\na rise of three cents from the previous week. SMR20 for September
\nbuyer was four cents higher at 250.<\/p>\n
Trading houses were offering SMR 20 at 247 cents a kg, SMR CV
\nat 289 cents, SMR L at 272, SMR 5 at 262, SMR 10 at 248 and drum
\nlatex at 190 cents.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/unrelieved-woes-hits-se-asia-rubber-trade-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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