March 18 (Bloomberg) -- Natural rubber futures climbed to the highest in more than two weeks as producers restated proposed output cuts and on speculation China, the world’s largest consumer, is adding the commodity to state stockpiles.

Prices in Tokyo rose as much as 3.1 percent to the highest since Feb. 27. Thailand, Indonesia and Malaysia, the world’s three biggest exporters, may cut production by 10 percent this year, a Thai official said. China’s State Reserve Bureau will buy 50,000 tons in the domestic market by mid-April, Zhu Xiuyan, chairman of the China Natural Rubber Association, said today.

“The 10 percent reduction in supply will be large enough to support prices,” Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said today by phone. “Chinese buying is another support.”

Rubber for August delivery, the most-active contract, rose 1.4 percent to 141 yen a kilogram ($1,429 a metric ton) on the Tokyo Commodity Exchange.

Thailand, Indonesia and Malaysia agreed in December to reduce combined exports by about 700,000 tons this year.

Farmers in the three nations will cut down rubber trees and reduce output by 900,000 tons to take the global total to 8.12 to 8.15 million tons, Somchai Charnnarongkul, director-general of the Department of Agriculture of Thailand farm ministry, said. Global output of natural rubber was around 9 million tons last year, he said.

The China State Reserve Bureau may buy even more than 50,000 tons of natural rubber to boost domestic prices, Zhu said today. Purchases by the bureau may reach 50,000 to 80,000 tons, Fan Rende, chairman of the China Rubber Industry Association, said in an interview in Guangzhou yesterday. That would be equivalent to 14 percent of the nation’s output last year.

“I heard previously that China had a plan to buy a total of 30,000 tons natural rubber for stockpiles in the three months to June 30,” Okachi’s Shigemoto said. “If China buys as much as 80,000 tons, that could be positive for prices.”

July-delivery rubber on the Shanghai Futures Exchange, the most-active contract, added 0.2 percent to close at 12,430 yuan ($1,818) a ton.

To contact the reporters on this story: Aya Takada in Tokyo atakada2@bloomberg.net; Rattaphol Onsanit in Bangkok at ronsanit@bloomberg.net

Last Updated: March 18, 2009 05:43 EDT