Weak ringgit boosts Malaysian rubber<\/p>\n
SINGAPORE (Reuter): Malaysian rubber producers will get a
\nboost from a falling ringgit, but the rest of the Southeast Asian
\nrubber market will probably remain weak due to ample supplies,
\ndealers said yesterday.<\/p>\n
"I think the market will sustain its rise with SMR 20 seen
\ntrading above 265 Malaysian cents if (the) ringgit softens
\nfurther," a senior dealer at a trading house in Malaysia said.<\/p>\n
The ringgit fell to an all-time low of 3.06 to the U.S. dollar
\nat 0040 GMT after Prime Minister Mahathir Mohamad suggested that
\ncurrency trading be banned.<\/p>\n
The Malaysians were also expecting a return of European
\nconsumer interest after the summer holiday season.<\/p>\n
"With expectations that the Europeans will place fresh buying
\norders, there is a tendency for the market to shoot up," a dealer
\nsaid. "Factories need the stock to resume their operations."<\/p>\n
Their sentiment was shared by dealers in Thailand, the world's
\nbiggest producer of rubber. "We expect more buying interest next
\nweek. Buyers were sidelined awaiting prices to come down," a
\ntrader in Thailand said.<\/p>\n
Dealers in Kuala Lumpur said monsoon rains in southern
\nThailand and northern Malaysia may also pinch supplies and help
\nprices.<\/p>\n
"This could prompt covering," one said.<\/p>\n
But rubber traders in Singapore and Indonesia were skeptical,
\nsaying the continued absence of strong buying by well-covered
\nconsumers would keep prices and trading flat.<\/p>\n
"The fundamental of too much nearby rubber has not changed.
\nWe're in for another bad week," a senior dealer for a rubber
\nhouse in Singapore said.<\/p>\n
Another veteran dealer said Thailand may be under renewed
\npressure to sell off its rubber stocks.<\/p>\n
"I think the IMF (International Monetary Fund) is going to put
\npressure on them. The whole economic management (strategy) will
\nbe questioned," he said.<\/p>\n
Bangkok said earlier it had no plans to sell its 110,000
\ntonnes in excess rubber stocks and even said it planned to spend
\nan additional one billion baht on propping up rubber prices.<\/p>\n
"We expect prices to soften further next week because of a
\nlack of fresh factors. Buyers, of course, want prices to continue
\nfalling," a dealer in Indonesia said.<\/p>\n
Traders said demand for the benchmark tire-grade SIR20
\nremained poor in trading late last week.<\/p>\n
"Demand is very thin and most buyers only want to get involved
\nin forward shipments," a trader said. "The problem is we still
\nhave stocks for nearby shipments."<\/p>\n
Malaysian dealers said the other long-term concern for the
\ntrade would be the impact on production caused by the smog from
\nforest fires in Indonesia which has enveloped the region in a
\ngray cloud.<\/p>\n
Prices of Thailand's key November RSS3 was quoted around 87.00
\nU.S. cents per kg FOB Bangkok while January\/February shipments
\nwere quoted at 95.00-96.00 cents a kg.<\/p>\n
Malaysia's benchmark October RSS1 buyer closed on Friday at
\n260.50 Malaysian cents a kg, up four cents from the previous
\nweek, and October SMR 20 buyer was up three cents at 260.<\/p>\n
Indonesian traders said offer prices for October shipment of
\nSIR20 was quoted at 39.75 cents FOB Padang, 40.25 cents FOB
\nPalembang for December shipment and 40.00 cents FOB Medan for
\nNovember.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/weak-ringgit-boosts-malaysian-rubber-1447893297",
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"sponsor": "Okusi Associates",
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