Sept. 10 (Bloomberg) -- Rubber fell the most in three weeks as oil prices dropped, cutting the appetite for the commodity used in tires, amid speculation that the U.S. Congress won’t endorse a strike against Syria.
The contract for February delivery lost 1.3 percent to 282.4 yen a kilogram ($2,825 a metric ton) on the Tokyo Commodity Exchange, the biggest drop at close for a most-active contract since Aug. 20. Futures declined 6.6 percent this year.
West Texas Intermediate slid for a second day as President Barack Obama said he wasn’t confident he will get congressional approval for a military strike. The drop in crude eased speculation prices of competing synthetic products will increase. Russia’s plan to get Syria to surrender its chemical weapons is a “potentially positive development” that could avert U.S. action, Obama said in an interview with NBC News.
Easing tension over Syria “is the reason why rubber prices declined,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo.
The contract for January delivery in Shanghai fell 1.5 percent to 20,550 yuan ($3,358) a ton. Thai rubber free-on-board fell 1.4 percent to 86.15 baht ($2.68) a kilogram today, according to the Rubber Research Institute of Thailand.
The Thai cabinet today approved a proposal by the National Rubber Policy Committee to double subsidies for farmer production costs to 21.2 billion baht.
Thai farmers will meet today to consider whether to hold rallies across the southern provinces on Sept. 14. They threatened to step up protests if the government failed to meet their demands to set a minimum price for ribbed smoked sheet. The southern provinces account for about 80 percent of production in Thailand, the world’s top producer and exporter.
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