Inventories available for sale in the three countries are “low contrary to what is being reported in the media,” the group, which comprises growers and exporters, said after a meeting on Saturday. The low level “would be further aggravated in the coming months with wintering expected to be severe.”
Rubber in Tokyo plunged into a bear market last month after supply exceeded consumption of the commodity used in car and truck tires. Futures capped an eighth weekly loss on Friday, the longest losing streak since May 2003. Wintering is the period when rubber trees shed their leaves, cutting latex yield.
“The recent sharp fall in natural rubber prices has resulted in natural rubber being traded at a discount to synthetic rubber, which is against the norm for the last few years,” said the group. Thailand, Indonesia and Malaysia represent about 70% of global production.
Rubber for July delivery gained 1.4% to 225.2 yen (72.38 baht) a kilogramme on the Tokyo Commodity Exchange, extending a 5.8% jump on Friday, the most since May.
IRCo views that prices are “unreasonably” low and would advise trade associations to encourage their members not to sell at prevailing rates, the group said. IRCo will also propose to “accelerate and enhance the implementation of the Supply Management Scheme,” it said.
The world market will probably have a surplus of 353,000 tonnes this year, a third year of glut, while inventories may jump 16% to an all-time high of 2.5 million tonnes, according to RCMA Commodities Asia Pte.
Stockpiles monitored by the Shanghai Futures Exchange total 207,658 tonnes, the highest level since October 2004, bourse data show. Imports by China, the largest buyer, will probably grow 11% this year to 4.26 million tonnes, compared with a growth of 14% a year earlier, data from the Association of Natural Rubber Producing Countries show.