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.