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BANGKOK, May 14 (Reuters) – The world’s top three rubber producers could revise down planned export cuts at a meeting in June because prices have risen along with demand, senior officials said on Thursday.
The International Tripartite Corporation (ITRC), which groups senior agricultural officials from the three countries, Thailand, Indonesia and Malaysia, could meet in mid-June to discuss whether the export cuts were still needed, they said.
The meeting was tentatively set to be held in Bangkok.
“We may not have to cut exports by that huge amount in the rest of this year as prices have rebounded and demand has improved, especially from China,” Yium Tavarolit, chief secretary of the International Rubber Consortium (IRCo), told Reuters.
The IRCo is an organisation set up by the three countries, bringing together private sector operators and ministry officials to oversee rubber prices and work out measures to support the market. Any steps must be ratified by the ITRC, a purely governmental organisation.
In December 2008 the three countries agreed to cut exports by a total of 915,000 tonnes in 2009 — compared with 2007 levels — in a bid to prop up prices.
They cut 270,000 tonnes in the first quarter and then proposed at the last meeting in April to cut a combined 48,000 tonnes per month from the second quarter.
“But we don’t think that we need any further cuts in exports as prices are not at the critical level they were at in late 2008,” said another senior official at the IRCo, who declined to be named.
The price of benchmark RSS3 has rebounded from a near seven-year year low of $1.10 per kg in December, due mostly to demand from China, the world’s biggest rubber consumer. On Thursday it was quoted at $1.80 per kg.
A trader in Thailand said Chinese buyers were in the market, seeking Thai RSS3 cargoes to fill demand for their domestic tyre industry.
China has been a rare bright spot in the struggling global car industry, posting year-on-year sales growth of more than 10 percent in March as government stimulus measures helped fuel a recovery in demand.
Traders said they expected rubber prices to rise further over the next few weeks, supported by limited supply as unseasonable rain hit key rubber-growing areas in Thailand and Malaysia, disrupting tapping.
“Supply has been trickling back, but still doesn’t meet demand, which is expected to rise further,” said a trader at Thailand’s Hat Yai rubber centre.
Source: Reuters