BANGKOK, Feb 3 (Reuters) – Thailand’s plan to buy 200,000
tonnes rubber is expected to be delayed by about one month as
officials need time to work out purchasing details, a senior
official said on Tuesday.
The delay is likely to add to pressure to physical rubber
prices, preventing them from rising significantly amid concerns
over weak demand, traders said.
“Some processes need to be done elaborately, mostly
legislative details. But we think we could start buying by
end-February or early of March,” said Somchai Charnnarongkul,
director general of the Department of Agriculture.
The government approved on Jan.20 an expenditure of 8 billion
baht ($228.8 million) to buy 200,000 tonnes of rubber from
farmers and keep them in stock to shore up prices.
The government would buy unsmoked sheets (USS3) from farmers
and transform them into ribbed smoked sheets (RSS3), the
export-grade rubber sheet, keep them in stocks and wait to buy at
profitable prices, Somchai said.
“We would buy rubber from farmers at market prices,” he said.
“We then would sell them domestically or export them if we see
some profit margin.”
Domestic USS3 price rebounded from 30 baht per kg, the lowest
since 2002, to stay at 47 baht per kg on Tuesday, supported by
seasonal falling supply as dry weather cut production.
Traders were unimpressed about the delay, saying that rubber
prices were likely to be capped in a narrow range and the
government would fail to prop up prices.
“Rubber prices may lose momentum to rise further due to the
slow government action,” a trader said.
($1=34.96 Baht)

Source:  Reuters

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