Rubber prices fall in KL, stable in Jakarta

Rubber prices fall in KL, stable in Jakarta

KUALA LUMPUR (Reuter): Regional competition and a lack of
foreign interest drove Malaysian rubber prices to a lower close
this week, traders said yesterday.

The Malaysian Rubber Exchange and Licensing Board quoted the
benchmark RSS1 buyer for October at 256.50 Malaysian cents (87
U.S. cents) a kg, down one cent from Thursday. The SMR20 buyer
for October was also a cent off to 257.

If compared to a week before, the RSS1 had fallen by 6.5
cents, while the SMR20 dipped by four cents.

"It's very difficult to move the trade," said a rubber trader
in Kuala Lumpur yesterday.

"Also, there's a bit of competition over prices due to the
weakening of the Indonesian rupiah and Thai baht along with the
ringgit," he said.

Traders said rivalry from especially Indonesian rubber had
driven Malaysian producers to quote the SMR20 around three
Malaysian cents lower than the relative price in Indonesia.

They said prices could stay at around present levels if the
ringgit weakened further next week.

At yesterday's close, trading houses were quoting the SMR CV
at 287, the SMR L at 266, the SMR 5 at 270, the SMR 10 at 259,
the SMR 20 at 258 and drum latex at 195.

In Jakarta, Indonesian rubber prices were generally stable in
late trading yesterday with traders expecting more bearishness
next week, traders said.

"For sure, we are going to experience another bearish market
next week. There is no direction at all and the market
desperately needs some incentives to boost sentiment," said one
trader.

Traders said demand was poor in the local market, but many
were comfortable selling rubber no matter how cheap the prices.

"This kind of approach seems to make sense in the wake of the
fluctuation in the rupiah. Many traders expect the government to
continue easing the tight money policy, at least in order to give
some boost to the currency," said one trader.

Traders said Thailand's decision not to sell rubber from its
stockpile failed to boost sentiment.

They also said next week's bearish local market sentiment was
in line with the expectation that Japanese rubber futures would
be range-bound, with traders monitoring dollar/yen rates and
movements in Asian currencies for clues to direction.

Traders said a deal was done at 40.50 U.S. cents/lb fob Medan
for December shipment.

Offer prices were quoted at 40.25 fob Palembang, 40.50 fob
Padang and Surabaya and 40 fob Pontianak and Jambi, all for
December shipment.