BANGKOK, Dec 2 (Reuters) – A drop in rubber supply after
flooding in Thailand, the world’s biggest producer, plus firmness
in other commodity prices could drive Tokyo futures to a 14-month
high by the end of 2009, a Reuters poll showed on Wednesday.
The benchmark rubber contract on the Tokyo Commodity Exchange
, currently May 2010, could hit 260 yen per kg by the end
of December, the highest since October 2008, according to a
median forecast of 10 analysts and dealers polled by Reuters.
That was 8.3 percent above the previous forecast of 240 yen
per kg in a similar poll in early November and was around 5.3
percent higher than the closing price on Nov. 30 of 247.0 yen per
kg.
Flooding in Thailand was pushing up prices, dealers said.
“We are hearing that tapping has been disrupted due to the
flood and, with other exterior factors such as the rise in
commodities led by gold prices, this is making it difficult for
TOCOM prices to decline,” he said.
The Association of Natural Rubber Producing Countries (ANRPC)
said this week that output in Thailand, Indonesia and Malaysia
would drop more than 6 percent in 2009 after unusually heavy rain
and that prices could rise to last year’s peak. [ID:nSP447277]
Dealers said climate change was becoming a key factor and
rubber supply could be cut further next year by unfavourable
weather, meaning it would fail to meet rising demand as the
global economy recovered.
“This year’s flooding is the worst scenario and now we are
concerned about next year’s El Nino that could bring dry weather,
which could cut supply again,” said a dealer at Thailand’s Hat
Yai rubber centre.
The World Meteorological Organisation (WMO) said on Tuesday
that the El Nino weather pattern warming the Pacific Ocean and
linked to drought in South Asia was likely to continue through
the first quarter of 2010. [ID:nGEE5B017W]
But it said a second year of El Nino conditions or rapid
transition to a La Nina pattern — its counterpart in which
waters cool — was considered unlikely.
Firmness in other commodity prices, notably gold, was likely
to support TOCOM during the year-end period, dealers said.
“With strong gold prices, as well as oil prices above $75 a
barrel, it’s difficult to expect TOCOM rubber prices to fall,”
another Tokyo-based dealer said.
Gold hit a record high for the second day on Wednesday as
weakness in the dollar and economic uncertainty over Dubai’s
credit woes kept attracting investors.
However, TOCOM rubber could slip back early in 2010, dealers
said. The May contract was expected to slip to 247.5 yen per kg
by the end of January, the poll said.
On the physical front, rubber prices were expected to drop
slightly if supply got back back to normal after flood water
receded in mid-December, dealers said.
“But prices probably won’t fall sharply as lower prices will
attract people wanting to buy ahead of the year-end holiday,” a
Malaysian trader said.
Thai RSS3 was expected to stay at $2.73 per kg by end
December, down slightly from $2.75 per kg by end-November, they
said.
Malaysian SMR20 and Indonesian SIR20, which were quoted at
$2.72 and $2.69 per kg respectively at the end of November, were
both forecast to be at $2.65 per kg by end December, the poll
said.

Forecasts for TOCOM sixth-month rubber prices in yen per kg:
end-December end-January
Median 260.0 247.5
Lowest 230.0 210.0
Highest 270.0 280.0
1. Unattributable 270 250
2. Unattributable 260-270 240
3. Fujitomi Co., Ltd. 260-270 250-260
4. CV Roben 240-270 250-280
5. Unattributable 230 230
6. CV Dramaga 230-250 250-270
7. A.T.S. Rubber 270 280
8. D.S. Futures 260-275 210-235
9. Supara Rubber 250 245
10. Unattributable 255 245

Forecasts for Thai RSS in U.S. dollar per kg:
end-Deccember end-January
Median 2.73 2.70
Lowest 2.70 2.70
Highest 2.90 2.80
1. Unattributable 2.90 2.70
2. CV Dramaga 2.70 2.80
3. A.T.S. Rubber 2.80 2.80
4. Supara Rubber 2.75 2.70
5. Unattributable 2.70 2.70
6. Unattributable 2.70 2.70

Forecasts for Thai STR20 in U.S. dollar per kg:
end-December end-January
Median 2.65 2.65
Lowest 2.60 2.64
Highest 2.87 2.87
1. Unattributable 2.87 2.87
2. CV Dramaga 2.60 2.64
3. Unattributable 2.70 2.70
4. Supara Rubber 2.65 2.65
5. Unattributable 2.65 2.65
6. Unattributable 2.65 2.65

Forecasts for Malaysia SMR20 in U.S. dollar per kg:
end-December end-January
Median 2.65 2.65
Lowest 2.60 2.65
Highest 2.87 2.87
1. Unattributable 2.87 2.87
2. CV Dramaga 2.60 2.65
3. Unattributable 2.70 2.70
4. Supara Rubber 2.65 2.65
5. Unattributable 2.65 2.65
6. Unattributable 2.65 2.65

Forecasts for Indonesia SIR20 in U.S. dollar per kg:
end-December end-January
Median 2.65 2.65
Lowest 2.43 2.43
Highest 2.87 2.65
1. Unattributable 2.87 2.87
2. Unattributable 2.43 2.43
3. CV Dramaga 2.60 2.65
4. Unattributable 2.65 2.65
5. Supara Rubber 2.65 2.65
6. Unattributable 2.65 2.65

Source: Reuters

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