Rubber down in Malaysia on lack of buying interest
Rubber down in Malaysia on lack of buying interest
KUALA LUMPUR (Reuter): Malaysian rubber prices ended lower on a lack of buying interest, worsened by talk that Thailand had excessive rubber stocks, traders said yesterday.
They said the weakness of the ringgit against the U.S. dollar had kept Malaysian rubber prices up in the last two weeks.
But a leading Thai rubber grower's statement on Sunday that his country had three times as much rubber stocks than projected by analysts created a bear market for the region, said traders.
"Our estimate is that Thailand has about 40,000 tons of stock and he gives a figure about three times as much," said a trader, referring to the official who spoke at a regional rubber forum in Bali, Indonesia.
"We don't know whether to believe him, but the buyers have disappeared after hearing him," added the trader.
Dealers said the news was unlikely to have a long-term impact on the Malaysian market, which was still influenced by movements of the ringgit.
At the close, the RSS1 for September buyer was officially quoted at 249.50 cents (95 U.S. cents) a kg, down half cent from Monday.
The SMR20 for September buyer was at 248, also down half cent. Dealers offered SMR CV at 293 cents, SMR L at 275, SMR 5 at 253, SMR 10 at 247, SMR 20 at 245 and latex at 190.
The INRO's five-day average price was 192.62 Malaysian/Singapore cents a kg on Aug 4, compared to 193.75 on Aug 1. The daily indicator was at 192.12 against 193.92.
Malaysia-based shipping brokers quoted freight rates for rubber from Malaysia to Rotterdam at $700 per 20-ft container, and $1,400 per 40-ft container.
Estates
Meanwhile the Statistics Department reported yesterday that the number of Malaysian rubber estates fell 11.9 percent between 1992 and 1995, largely due to land acquisition for development projects, reports said Tuesday.
The Statistics Department in its preliminary estimate said the reduction was due to development projects by the government and the private sector, especially for infrastructure, housing and recreational purposes.
Rubber estates were also cleared to make way for other more productive crops, mostly palm oil, the department was reported as saying by The Star newspaper.
The number of rubber estates in 1995 stood at 1,048, down from 1,189 in 1992.
Total hectarage planted with rubber also declined 18.6 percent from 314,133 ha in 1992 to 255,693 ha in 1995, the department said.
A lower yield per hectare of latex saw latex production drop by 27.46 percent to 240,711 tons in 1995 from 331,843 tons in 1992.
Total imports of natural rubber surged to 235,806 tons in 1995 from 95, 857 tons in 1992.
Total domestic consumption rose to 327,439 tons in 1995, compared with 248,726 tons in 1992, mainly going to the rubber gloves, rubber threads, tires and tubes industries.
Malaysia's main rubber export markets were the United States, South Korea, Germany, Japan and the Netherlands.
In Jakarta, Indonesian tire-grade SIR20 rubber prices were stable in late trading yesterday, with Michelin heard buying end- October shipments, traders said.
"Michelin bought about 600 tons from several parties today at 98.25 cents/kg for end-October shipment," one trader said, adding that it was probably the SIR20 M grade, which had a slight premium over the regular SIR20 C grade.
"I didn't want to sell at that price because it was not to my liking," he said.
The traders also said news of high stock levels in Thailand kept the market quiet, with most other buyers staying sidelined in anticipation of weaker prices.
They said that a Thai industry official who attended a gathering of regional rubber producers on the tourist island of Bali over the weekend had told the meeting that Thailand had stock levels of about 140,000 tons.
"It was not clear if the amount was stocks waiting to be sold or excess stocks, but the news saw buyers withdrawing from the market," one said. "Buyers were present at the meeting."
Traders were unanimous that the news would dampen market sentiment, adding that prices could weaken on Wednesday.
"I am puzzled at why the Thai official revealed such a sensitive thing at a meeting where buyers were present," one trader said. "Buyers are obviously going to be sidelined because of the large amount of rubber available in the market."
Another trader said the announcement could affect the Indonesian market, where buyers were already scarce.
"The Indonesian market will be hit. It was a wrong move, especially at a time when the market is depressed."
Traders said September SIR20 offers were quoted at 44.00 cents/lb fob Medan, 43.75-44.00 cents fob Palembang and Surabaya, 43.75 cents fob Padang and 43.00 cents fob Pontianak and Jambi.