TOKYO (Mar 27): Benchmark Tokyo rubber futures ended down 2.2 percent on Friday due to a pullback in oil prices, but posted a marginal gain for the week helped in part by a seasonal decline in output.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, hit their highest in nearly three weeks on Tuesday on the back of the dollar’s weakness against the euro and the current wintering period, when rubber trees become drier, resulting in lower yields.

But the market has come under pressure in the latter half of the week as a jump in Vietnam’s exports in January-March and a double-digit percentage decline in Chin’s natural rubber imports in January-February rekindled worries over slowing demand.

Oil prices fell over a percentage point on Friday as traders estimated that the threat of a disruption to world crude supplies from Saudi Arabia-led air strikes in Yemen was low.

The Tokyo Commodity Exchange rubber contract for September delivery <0#2JRU:> finished 4.7 yen lower at 211.3 yen per kg.

For the week, the benchmark contract rose 0.4 percent, the biggest percentage gain in two weeks.

“The market fell back due to a pull-back in oil prices,” said a Tokyo-based dealer. “Despite the weekly gain, market fundamentals remained unchanged.”

The U.S. dollar was quoted around 119.22 yen, compared with around 118.33 yen on Thursday afternoon.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 235 yuan to finish at 12,815 yuan per tonne.

Businesses in Myanmar have colluded with military and government officials to seize vast tracts of farmland from ethnic minority villagers, using much of the land for rubber plantations, the Thomson Reuters Foundation reported on Thursday citing a UK-based rights group.

The front-month rubber contract on Singapore’s SICOM exchange for April delivery last traded at 142.4 U.S. cents per kg, down 1.1 cent.

Source: Reuters

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