Thailand, the top rubber supplier, asked exporters to suspend shipments to stem a plunge in prices and will ask banks to offer low-interest loans to help shippers stockpile the commodity, the deputy prime minister said.
“I’ve told exporters to stop shipments because if they continue exporting, buyers will use futures prices as a reference point to push domestic rates lower,” Suthep Thaugsuban told reporters after a meeting with the Thai Rubber Association and the Thai Latex Association.
Rubber futures tumbled to the lowest level in more than four months today after the worst earthquake on record in Japan caused power disruptions, forcing carmakers to halt production and raising concern demand for tires may slump.
August-delivery futures, the most-active contract, plunged as much as 13 percent, the most since April last year, to 335 yen a kilogram ($4,088 a metric ton) in after-hours trading on the Tokyo Commodity Exchange. That’s the lowest price since Nov. 4. Trading in this session will be settled tomorrow. The Thai benchmark price plunged 24 percent from its peak of 198.30 baht ($6.54) per kilogram on Feb. 21 to 150.25 baht today.
The government will negotiate with commercial banks to extend low-interest loans to exporters for them to buy unsmoked sheets from farmers at a minimum price of 120 baht a kilogram, said Suthep, who chairs the rubber policy committee. The government will also encourage farmers not to sell sheet below the minimum level, he added.
The country will ask for cooperation from the International Tripartite Rubber Council, which represents growers and exporters in Thailand, Indonesia and Malaysia, to submit letters to Japan and China for them to examine whether there is irregular futures trading, Suthep said. The three growers represent about 70 percent of global supply.