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Tokyo rubber futures to edge higher

Tokyo rubber futures to edge higher

MUMBAI: Tokyo rubber futures, which set the tone for tyre-grade prices, are likely to edge higher this week as dealers are expecting producing countries to intervene in the market to support prices.
Thai raw sugar discounts to New York futures are expected to remain steady, while Vietnamese robusta may increase its discount to London futures.
Cocoa butter could edge higher on an improvement in demand.
The benchmark Tokyo Commodity Exchange rubber contract for April delivery hit a three-and-a-half month high on Monday, boosted by the yen’s decline to a seven-year low against the dollar.
“There is hardly any improvement on demand side. On supply side, producers are expected to come up with new measures to limit supplies,” said a Singapore-based dealer.
Rubber producers in Asia are likely to meet this week to look at more measures to push up prices, which are not far above five-year lows, including restrictions on supply to global markets.
“In the last one month, tapping has been affected in almost all producing countries due to lower prices. Further fall in tapping could support prices,” the dealer said.
In the sugar market, the widened discounts for Thai raw sugar over New York futures are likely to remain stable this week as sellers are struggling to clinch deals in over supplied market.
New York raw sugar futures finished 0.7 percent lower on Friday at 15.90 cents a lb due to lacklustre demand and expectations of much-needed rains in parched cane regions in Brazil, the world’s top producer and exporter.
Vietnamese robusta’s discount to London futures could widen as harvesting is gaining momentum there, said another Singapore-based dealer.
“Last week discount for some grades was $100 (a tonne.) This could increase to $110 as now more people are selling new season crop,” the dealer said.