S'pore rubber frets over Indonesian fires

S'pore rubber frets over Indonesian fires

SINGAPORE (Reuter): The Singapore rubber trade was concerned yesterday over news that some Indonesian rubber plantations have been hit by rampaging forest fires and said prices will probably firm as a result, dealers said.

"It will firm up the market next week. We were sort of expecting it because there are many plantations there scattered all over the place," a dealer said.

Indonesian Agriculture Minister Sjarifuddin Baharsjah said some 173 plantations were on fire on Sumatra and Sulawesi islands and in Kalimantan and that the blaze will have an impact on supplies of both commodities.

"There's no reaction today, but we'll see the impact on prices next week. That's when the trade will get a chance to assess what the Indonesian supply situation will look like," a dealer said.

Traders said it was still hard to get an assessment of the actual damage inflicted on Indonesian rubber plantations. "We're waiting for more reports to come in," a dealer said.

At around 0945 GMT, November RSS3 was seen at 88.50-89.50 U.S. cents a kg from the previous 88.75 cents.

In Tokyo, rubber futures ended mostly firmer on Friday, as forest fires in Indonesia provided support to the market, traders said.

Prices ranged from flat to 0.9 yen per kg higher. Benchmark March was up 0.9 yen at 120.1 yen. Activity was lackluster. "Concern that forest fires in Indonesia could disrupt rubber output in the country stimulated short-covering," one trader said. "But I don't think rubber prices will rise further on that factor. The overall demand/supply relationship in rubber- producing countries has not improved yet," he said.