Southeast Asian rubber outlook gloomy

Southeast Asian rubber outlook gloomy

SINGAPORE (Reuter): The Southeast Asian rubber business is in
for another gloomy week, with ample supplies and soft demand
keeping prices on the defensive, dealers said yesterday.

"There's plenty of rubber around. We're at peak production.
Fundamentally, it's still a bearish market," said a dealer for a
commodity house in Singapore.

Dealers in Thailand, Indonesia and Malaysia said demand
remained poor with producers looking for any kind of leads in the
market.

"We are going to experience another bearish market this week.
There is no direction at all and the market desperately needs
some incentives to boost sentiment," a trader in Indonesia said.

"I think we'll see a decline of between four to six
(Malaysian) cents this week as there really doesn't seem to be
any buying interest," said a rubber trader in Kuala Lumpur.

Floods last month in Thailand, the world's biggest producer of
natural rubber, have abated and supplies are seen rising.

"I guess tapping activities will resume at normal pace in many
places that were inundated late last month," a trader in Thailand
said.

The unsettled state of regional currency markets will continue
to dog the rubber trade.

"There's a bit of competition over prices due to the weakening
of the Indonesian rupiah and Thai baht along with the (Malaysian)
ringgit," a dealer in Malaysia said.

"The currency situation has not stabilized yet. With too much
rubber on nearby months, the outlook is not rosy," a trader in
Singapore for a foreign rubber house added.

Indonesian dealers said that with demand so poor, producers
were comfortable selling rubber at whatever level they can find.
Malaysian producers are quoting their key SMR20 rubber around
three Malaysian cents lower than those from their competitors in
Indonesia in an attempt to attract buyers.

"This kind of approach seems to make sense in the wake of the
fluctuation in the rupiah," a trader in Indonesia said.

"Traders seem to be selling rubber at their own prices. There
does not seem to be any particular trend that traders can
follow," another dealer said.

Traders said the Thai benchmark RSS3 for October shipment was
quoted around 85.00-86.00 U.S. cents a kg FOB Bangkok while
January/February was quoted around 92.00-93.00 cents/kg on the
same basis.

In Indonesia, dealers said offer prices were quoted at 40.25
cents a kg FOB Palembang, 40.50 cents FOB Padang and Surabaya and
40.00 cents FOB Pontianak and Jambi, all for December shipment.

The Malaysian Rubber Exchange and Licensing Board quoted the
benchmark RSS1 buyer for October shipment at 256.50 Malaysian
cents a kg, down 6.5 cents from a week ago, at the close of trade
last Friday.

The SMR20 rubber for October buyer was quoted four Malaysian
cents down at 257 cents a kg.