Rubber gains the most in four months

BANGKOK: Rubber advanced by the most in four months on optimism that China will boost economic growth, improving demand for the commodity used for tyres.

October-delivery rubber rose asmuch as 3.7%, the biggest gain since Jan 17, to 279.9 yen a kg (US$3,531 a tonne) on the Tokyo Commodity Exchange, before settling at 278.7 yen. The most-active contract tumbled 15% in the past two weeks as Europe’s debt crisis escalated.

Asian stocks rose, with the regional index rebounding from its biggest drop in six months, after Premier Wen Jiabao said China would focus more on bolstering growth, indicating policies might be loosened further as inflation moderated.

“China’s focus on boosting growth and Thailand’s price-support policy helped trigger the gains,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.

German and French leaders met in Berlin yesterday before a European Union summit on May 23 to map out a revised plan after Greece’s possible exit erased almost US$4 trillion from global stock markets this month.

Thailand, the biggest exporter, plans to buy more than 10,000 tonnes on the Tokyo and Shanghai exchanges and will keep buying from farmers until prices reach appropriate levels, Rubber Estate Organisation managing director Chanachai Pleng siriwat said on May 18.

September-delivery rubber on the Shanghai Futures Exchange gained 2.7% to close at 24,735 yuan (US$3,910) a tonne. Thai rubber on a free-on-board basis rose 1.1% to 116.05 baht (US$3.70) a kg yesterday, according to the Rubber Research Institute of Thailand. — Bloomberg