RI, Thailand, Malaysia plan base rubber price

RI, Thailand, Malaysia plan base rubber price

BANGKOK (Reuters): Thailand, Indonesia and Malaysia have
agreed to jointly set a minimum rubber selling price, Thai Deputy
Agriculture Minister Arkhom Engchuan said on Tuesday.

"The joint plan is to prevent buyers from further suppressing
prices that each country separately sells at in the world
market," Arkhom told Reuters in an interview.

The Thai minister was expected to hold a press conference on
Wednesday at 0300 GMT to formally announce the plan.

According to the pricing plan, the three countries would set
up a joint committee that will set common selling prices on a
daily basis to be used as a benchmark, Arkhom said.

"We will set up a minimum selling price, in dollar-denominated
prices, so that each country cannot sell at lower prices than
this," Arkhom said.

On Tuesday, Indonesia's SIR20 was quoted at 56 U.S. cents per
kg for August shipment, while Malaysia's SMR20 was quoted at
around 58 cents, and Thai STR20 was quoted at around 60 cents for
the same shipment, traders said.

Thailand, Indonesia and Malaysia account for almost 80 percent
of the world's production.

Thailand is the world's top rubber exporter and Indonesia is
the second.

The three countries are in talks on how to boost ailing rubber
prices, which last year tumbled to their lowest levels in 30
years to an average of around 23 U.S. cents/lb, mainly because of
a glut in supply and weak demand.

Prices are now around 25-26 U.S. cents/lb.

Arkhom said private exporters' cooperation was needed if the
minimum price scheme was to work.

"We have to ask for help from private exporters on this, and
if they refuse to cooperate, we might need sanctions," Arkhom
said, but did not elaborate.

Meanwhile, senior officials from the three countries were
working on details for the pricing plan, he said.

The plan was expected to be ready for a ministerial meeting of
the three countries in September, where it would be formally
implemented, Arkhom said.

Meanwhile, coffee prices leapt 4.7 percent in London on
Monday, rebounding from Friday's seven-year low of US$826 a ton
over weather worries in Brazil, the world's largest coffee
producing nation.

On the London International Financial Futures Exchange
(LIFFE), robusta coffee prices rose to close sharply firmer on
Monday and near the day's highs. September futures last traded
$32 a ton higher at $858, just off the day's peak of $864.

"The market's firmly driven by the weather. It's mainly
speculative buying and dealer short covering," a trader said.

In New York, September arabicas were 3.80 cents a lb up after
Weather Services Corp. (WSC) said early on Monday that cooler
weather would move into Brazil's coffee areas.