Rubber futures slumped by the most in more than three months as Thailand may end a price-support program next month, spurring speculation shipments may increase from the world’s largest producer.
The contract for July delivery tumbled 3 percent to 314.6 yen a kilogram ($3,366 a metric ton) on the Tokyo Commodity Exchange, the largest daily loss since Nov. 5. It was also the lowest settlement for the most-active contract since Jan. 29. The drop pared this year’s gain to 4 percent.
The Thai government has to review the purchasing program when it expires at the end of March, as “prices have stabilized,” Yuttapong Charasathien, deputy farm minister, said today by phone. The government introduced the program last year, which included withholding shipments, as prices in Tokyo fell to a three-year low.
“The market came under pressure as speculation grew that shipments from Thailand may increase,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said today by phone.
Futures also declined amid concerns that demand may weaken from China, the world’s largest consumer, Saito said. Chinese shares declined the most in a month on speculation the nation’s economic recovery lacks strength. Retail sales in China gained at the slowest pace since 2009 during last week’s Lunar New Year festival, a Ministry of Commerce statement showed Feb. 15.
Natural-rubber stockpiles monitored by the Shanghai Futures Exchange rose 1,201 tons to 100,015 tons, nearing an almost three-year high reached in January, data from the bourse showed on Feb. 8. The figures will be updated on Feb. 22.
The contract for September delivery in Shanghai lost 0.5 percent to close at 26,090 yuan ($4,178) a ton. Thai rubber free-on-board fell 1 percent to 96.45 baht ($3.23) a kilogram today, according to the Rubber Research Institute of Thailand.