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Thursday, 12 July 2012 03:04 - - {{hitsCtrl.values.hits}}
Reuters: Thailand, the world's biggest rubber producer and exporter, is asking other major producers Malaysia and Indonesia to help it set a benchmark rubber export price, which has fallen by almost a fifth since its peak this year due to weak demand.
"Attempts by Thailand alone cannot push up prices as there are external factors weighing on rubber prices, especially the euro zone debt crisis," Thai Deputy Agriculture Minister Nattawut Saikuar told reporters.
Prices for export-grade rubber sheets (RSS3) in Thailand have fallen to about $3.25 per kg on Friday from this year's peak of $4.10 per kg, when seasonal dry weather cut supply.
That dragged raw material prices (USS3) down to 89 baht a kg from the year high of 116 baht a kg.
Traders, however, said it was very difficult for the three countries to agree on a benchmark price because different production costs meant producers were willing to accept different profit margins.
Indonesia's trade minister also said last week the country had no plans to impose any export quotas on rubber to stem falling prices.
"I don't think Indonesia and Malaysia would decline to sell if they can make profit despite cheap prices," said a trader in Thailand's Hat Yai rubber centre.
Thailand had approved a 15 billion baht ($471 million) budget in January to buy rubber from farmers in a bid to push up unsmoked rubber sheet (USS3) prices to above 120 baht per kg.
But prices have stubbornly stuck to around the 90 baht-level, in line with global prices which have been weighed down by fears of weakening demand due to the global economic slowdown.
Nattawut admitted the program had so far not achieved its goal, but said the intervention scheme would continue.
"Around 30 percent of the total budget of 15 billion baht was used up in buying and we bought not many of rubber so far. That's why prices were still falling," he said.
