KL urges tappers to return to work as rubber bounces back
KL urges tappers to return to work as rubber bounces back
KUALA LUMPUR (AFP): As rubber prices continue to surge,
Malaysia urged smallholders yesterday to go back to tapping three
years after they had been encouraged to quit the industry when
prices plunged to five-year lows.
Primary Industries Minister Lim Keng Yaik said the upsurge
confirmed the resilience of natural rubber as a viable cash crop
which could be tapped when prices were good or "kept untapped in
the trees" when prices were poor.
"Therefore, it may still pay in the long run for plantation
companies, as well as the nation, to remain in natural rubber,
which may still have a bright future," Lim said.
Lim said the current boom reflected successful joint efforts
by producers to coordinate and rationalize supply since 1991.
Rubber prices, which three years ago were 215.00 sen (79.6
U.S. cents) a kilogram (2.2 pounds), have in the past weeks
rocketed to six-year highs, the benchmark RSS I grade closing
Thursday at 322.00 sen a kilogram.
The International Natural Rubber Organization (INRO) five-day
moving average, derived from prices in London, New York,
Singapore and Kuala Lumpur, soared to 243.45 Malaysian-Singapore
cents a kilo Thursday from 169-170 level at the end of 1991.
Depressed prices had forced some producers, particularly
smallholders, to abandon tapping and shift into other employment.
Producers, led by Malaysia, Indonesia and Thailand,
established in 1991 a coordinating committee on production and
market strategies to chart plans to adjust production and
marketing strategies and ensure better returns.
"Obviously these efforts have borne fruit in the form of the
current upsurge," Lim said.
In Singapore, rubber futures prices ended slightly lower in
very quiet trading yesterday with interest lacking because of a
market holiday in Thailand and the pre-holiday mood in Japan,
dealers said.
At 09:45 GMT, Basis October RSS 1 was last traded at 181.00
Singapore cents, RSS 3 at 137.00 U.S. cents and TSR 20 at 178.00
Singapore cents.
"Markets in Tokyo and Kobe virtually saw no trading as a pre-
holiday mood, ahead of the Golden Week, kept traders away while
the closure of the Thai market for the Queen's birthday, gave
more reasons for traders here to move to the sidelines," a dealer
said.
Thai buyers, who were active earlier in the week, were absent
and sellers were not keen to make offers, the dealer said, adding
"it was a wait-and-see mood in the market from start to end."