Top rubber producers yet to agree on how to support price

BANGKOK: Top rubber producers will meet in Malaysia next week to discuss measures to support prices, said Thailand’s Agriculture Minister as farmers reel from a slide in the value of the commodity to a five-year low.

A supply glut and weak demand from main consumer China drove international rubber prices to their weakest level since 2009 on Friday.

Thai and Malaysian rubber producers said last week that they supported an Indonesian proposal to set a minimum price, but have made no announcements on how they plan to put a floor under the market.

Rubber producers have yet to agree with any concrete measures to reverse the price slide, Petipong Pungbun Na Ayudhya told Reuters on Monday after a meeting in Bangkok with Malaysia’s Plantations Industries and Commodities Minister Douglas Uggah Embas.

“Our senior officials will meet next week,” Petipong said.

“What I’m trying to do is review the measures that have been discussed in the past to see what is possible.”

He did not say whether Indonesian representatives would attend the meeting in Kuala Lumpur.

Petipong and Embas plan to call a ministerial meeting with other rubber producers in South-East Asia at a later date, a Thai agriculture ministry official says.

Previous efforts to shore up prices by the three major South-East Asian producers, who account for more than 70% of global natural rubber output, have had little success even when they involved concrete measures such as supply cuts.

Indonesia, Thailand and Malaysia, which are grouped under the International Rubber Consortium, last acted jointly in 2012/2013, agreeing to cut exports by 300,000 tonnes, or about 3% of 2012 global output.

Rubber prices rose briefly in response to that plan before sliding again due to fears that the debt crisis in Europe could derail demand.

Thai and Malaysian rubber producers said last week that they supported an Indonesian proposal to set a US$1.50 per kg minimum price for rubber. — Reuters