Rubber trade remains quiet in Jakarta, S'pore

Rubber trade remains quiet in Jakarta, S'pore

SINGAPORE (Reuter): Trading in the Singapore rubber market was quiet by midsession yesterday as the trade remained skittish about the currency problems of Southeast Asia, dealers said.

The market was also sidelined due to concern over the looming decision by the Thai government next week on whether to sell an estimated 100,000 tons in excess stocks, they said.

"The currency situation is still bothering the market. People are also cautious ahead of the Thai decision next week and they were waiting for leads later today. Nothing was really traded this morning," a dealer said.

The Thai government had postponed on Wednesday its decision on selling its rubber stocks, saying the decision will be taken on Tuesday, Sept. 9.

In Jakarta, Indonesian tire-grade SIR20 offer prices were little changed in late trading yesterday as traders expected further uncertainty in the market next week, traders said.

"Traders do not dare to get involved in forward trading for fear of further currency movement next week. Frankly speaking, traders do not expect much change in the market sentiment to happen," said one trader in Jakarta.

Traders said Thailand's plan to announce next week whether it would sell its excess stock did not create a big concern among them.

Traders said SIR20 were quoted at 41.00 fob Medan for September shipment, 41.25 fob Palembang, Padang and Surabaya and 40.75 fob Pontianak and Jambi.

In Bangkok, currency turmoil and news of the possible sale of Thai government stockpile rubber next week has put pressure on prices, traders said yesterday.

But the downside was seen limited by tighter supplies caused by recent floods in southern Thailand, the country's major rubber-producing region, they said.

"With the currency volatility across the region, and in major rubber-producing countries such as Thailand, Indonesia and Malaysia in particular, buyers were sidelined, awaiting prices to come down further," said a Hat Yai-based trader.

"The rubber woes were exacerbated by the imminent sale of government stocks. Although the government is yet to reach a decision on the matter, the market is already convinced that it will sell part of its stock," he told Reuters.

Thailand's National Rubber Policy Committee said it will decide whether to sell rubber from its stockpile on Sept. 9.

A government official said some 10,000-20,000 tons of the 100,000-ton stock of smoked and unsmoked rubber sheets may be released to raise revenue and spare the government from having to use money from state budgets to boost incomes of rubber smallholders.

Thai benchmark RSS3 for October shipment was indicated around 87.00-88.00 U.S. cents a kg FOB Bangkok. January/February was quoted around 93.00-95.00 U.S. cents on the same basis.