Thai Govt Approves Plan To Sell 200,000 Tonne Rubber Stockpile -Official(25/08/2557)

[font=arial]The Thai military [/font]government has approved a plan to sell its 200,000 tonne rubberstockpile to ease price pressures and cut storage costs, a  government official said on Monday (Aug 25), potentially hitting prices in the short-term.

[font=arial]Thailand, the world?s biggest rubber exporter, normally [/font] about 250,000-300,000 tonnes a month. Global rubber prices have fallen more than 25 percent this year, due to oversupply and worries about demand from top consumer China.

[font=arial]This overhang [/font]of stocks has kept pressure on prices for such a long time. We are about to cut it off to reduce this negative factor which keeps pressure on prices,? Dumrong Jirasutas, head of the Department of Agriculture told Reuters.

[font=arial]Dumrong declined to say if the [/font]200,000 tonnes would be sold at once or reduced gradually.

[font=arial]Benchmark sixth-month Tokyo [/font]rubber futures for January delivery were up slightly at 203.1 yen per kg in early Asian trade, supported by firmer equity markets and a weaker Japanese yen.

[font=arial]However, prices have tumbled in recent years, with benchmark Thai smoked [/font]rubber sheet(RSS3) being offered on Monday at $1.85 per kg on Monday, down from a record $6.40 per kg in 2011.

[font=arial]Traders said on Monday (Aug 25) [/font]the sale decision could put further pressure on rubber prices in the short-term.

[font=arial]Thailand?s military government in June decided to [/font]shelve a plan by the previous administration to sell 200,000 tonnes of rubber from stocks, focusing instead on measures to increase domestic consumption to shore up prices.


[font=arial]The previous civilian caretaker government had planned the stock sales after buying rubber from farmers during an [/font]intervention to prop up prices that ran from October 2012 to May 2013.

[font=arial]Thailand, the world?s biggest rubber producer and exporter, produced 4.2 million tonnes of rubber in 2013, of which 3.7 million tonnes were exported.[/font]



[font=arial]Source:(Reuters, August 25, 2014)[/font]