Rubber futures jumped to their highest level in almost two months after shipment restrictions by Thailand, the world's largest exporter, boosted cash prices above the benchmark contract on the Tokyo Commodity Exchange.
A tapper scrapes bark off a rubber tree, to collect the oozing latex in a small cup attached to the trunk below. (Photo by Pinit Jarusombat)
Rubber for delivery in October climbed as much as 3.3% to 285.2 yen a kilogramme (US$2,884 a metric tonne) on the Tokyo bourse, the highest level for a most-active contract since March 13. Futures traded at 279.8 yen at 10.16am, paring this year's losses to 7.5%.
Thai rubber free-on-board rose 0.3% to 89.10 baht ($3) a kilogramme on Wednesday, the highest level since March 12, according to the Rubber Research Institute of Thailand. It was a 13% rebound from this year’s low of 79 baht reached on April 19. Thailand, the biggest rubber producer, extended curbs on exports by 60 days to the end of May to boost prices, Deputy Agriculture and Cooperatives Minister Yuttapong Charasathien said last month.
"Futures in Tokyo corrected higher as the market is undervalued compared with Thai cash prices," Hideshi Matsunaga, an analyst at broker ACE Koeki Co in Tokyo, said by phone on Thursday.
Thailand aims to lower shipments of rubber by 10% through May to help support prices, Mr Yuttapong said on April 11. The government has no immediate plan to sell rubber from stockpiles, he said.
Rubber for delivery in September on the Shanghai Futures Exchange lost 0.6% to 20,380 yuan ($3,318) a tonne.