Top three rubber producers to cut exports in 2H17

Malaysia, together with Thailand and Indonesia, are working on cutting rubber exports in the second half of this year to curb declining prices, according to a report by the Bangkok Post today.

In search for price-support measures, the three countries have agreed to move a meeting between the farm ministers of the three biggest natural rubber producers to an earlier date in September, from December this year, the Thai news agency said.

Citing a Thai official, the news agency said senior officials are deciding on the appropriate amount of export cuts, and that the measure is expected to be adopted soon.

"The International Tripartite Rubber Council (ITRC) is due to meet shortly, as the Thai government seeks measures to support prices in the short-term,” Rubber Authority of Thailand governor Titus Suksaard was quoted as saying.

Titus gave no details on the timeline and of the cut, but senior industry officials expects the cut to be the same as last year at around 300,000 tonnes, the Bangkok Post added.

The news agency attributed the recent price dip largely to an import halt from China — the largest rubber importer — over the past few months, amid a spike in stockpile to 250,000 tonnes from its normal rate of around 60,000 tonnes, according to rubber traders.

"Rubber fundamentals remain strong, with seasonal rains in the three countries disrupting tapping and reducing supply, which should support rubber prices over the next few months," theBangkok Post quoted Luckchai Kittipol, honorary president of the Thai Rubber Association, as saying.

Malaysia is the third largest producer of natural rubber in the world, with annual output of around 720,000 tonnes, trailing Indonesia and Thailand at 3.1 million tonnes and 4.1 million tones, respectively.

Output from the three countries accounts for over 60% of total global rubber output of circa 12 million tonnes per year, according to the report.