Market and product

Global rubber markets were abuzz with the supply cut announced by three major producers. Prices rebounded on Thursday post the supply cut plans announced by the three Southeast Asian countries grouped in the International Tripartite Rubber Council (ITRC).

Thailand, Malaysia and Indonesia are the three rubber giants who are gearing upto cut exports to arrest further decline in prices. They are expected to cut exports by 615,000 tonnes in the six months until August 31, 2016.

As per the agreement, Indonesia will cut its exports by 238,736 tonnes, while Malaysia and Thailand have vowed to reduce their overseas shipments by 52,259 tons and 324,005 tonnes, respectively.

On Thursday, benchmark SMR-20 variety surged two per cent to $1,107 a tonne at Kuala Lumpur; another, Latex, a similar rise to $885.50 a tonne. In India, prices of RSS-4 and RSS-5 did not surge but failed to fall at the wholesale market in Kottayam.

However, experts deem this as an immediate reaction to the reports of supply cuts. The key thing is whether this trend will continue for long. Reduced demand from China is another block amidst the slowing economy in that country.