TOKYO: Rubber prices in Tokyo Commodity Exchange (TOCOM) surged ahead on QE3 announcement on Thursday by the US Federal Reserve, supported by rise in crude oil prices and fall in Indonesian production, according to market analysts.
The most active Tocom February futures rose 13 Yen to 254.9 Yen per kg. on day session while January contract rose 12.2 Yen to 253.0 per kg. The prices have attained two-month high levels on continued upsurge.
At NYMEX WTI crude oil has risen to $99.37 levels while Brent Crude Oil at ICE rose to $116.77 levels as QE announcement signals more liquidity in the system that is beneficial for economic growth.
On the global front, Thailand, Indonesia and Malaysia are increasing its efforts to sustain prices above remunerative levels for its plantation industry. According to Thailand’s Deputy Farm Minister national rubber policy committee approved a budget of 30 billion baht to purchase rubber sheets from the farmers at above market rates.
India’s natural rubber consumption rose five per cent to 4.20 lakh tonnes in April-August 2012 on YoY basis while production showed only a marginal rise of 0.8 per cent to 331700 tonnes during the same period. Imports dropped 17 per cent on a year to 14870 tonnes in August on reduced imports by the tyre manufacturing industry.
According to Indonesian Rubber Association, natural rubber output in the country is likely to decline 10 per cent to 2.8 million tonnes on YoY basis in 2012 on dry weather conditions.
Source: Rubber Country
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