Chinese buyers default on 80,000t Indonesian rubber
Reuters 31 October 2008
(JAKARTA) Indonesian exporters have cancelled shipments of up to 80,000 tonnes of Indonesian rubber after Chinese buyers failed to pay up because prices dropped, an Indonesia Rubber Association official said yesterday.
Indonesia, the world’s second largest rubber producer after Thailand, exported 2.41 million tonnes of natural rubber in 2007.
‘There are a lot of cancellations, especially for shipment to China. We can’t send the cargoes because they haven’t opened the letters of credit,’ Suharto Honggokusumo, the association’s executive director, told reporters.
He said between 60,000 and 80,000 tonnes of shipments to China had been cancelled.
Buyers had agreed to buy at US$2.8-$3 per kg, Mr Honggokusumo said but rubber prices have fallen to around US$1.8 per kg on fears that a global recession will hit demand.
The group had said Indonesia’s rubber exports were set to grow by 4 per cent this year, down from an earlier forecast of 5-7 per cent, as economic weakness dents demand from key buyers.
Demand for cars has slumped in many markets as consumers turn cautious in the face of a global financial crisis, and with more than 70 per cent of rubber sales going to the auto tyre industry, top producers Thailand, Indonesia and Malaysia are being hit.
The Agriculture Ministry has said it plans to cut production of natural rubber output by 30 per cent this year to lift slumping prices by encouraging farmers to reduce their tapping frequency to every three days instead of every two.
The benchmark rubber contract on the Tokyo Commodity Exchange for April 2009 delivery rose 12.5 yen, or 7.1 per cent, to end the morning session at 186.4 yen (US$1.92) per kg.
Earlier this week, the TOCOM rubber market reached its lowest level since July 2005 as investors abandoned riskier assets amid heightened credit concerns.
Rubber output from Indonesia is expected to grow by 4 per cent this year from 2.7 million tonnes in 2007.
1 comment:
Rubber Cargoes Cancelled
Chinese buyers default on 80,000t Indonesian rubber
Reuters
31 October 2008
(JAKARTA) Indonesian exporters have cancelled shipments of up to 80,000 tonnes of Indonesian rubber after Chinese buyers failed to pay up because prices dropped, an Indonesia Rubber Association official said yesterday.
Indonesia, the world’s second largest rubber producer after Thailand, exported 2.41 million tonnes of natural rubber in 2007.
‘There are a lot of cancellations, especially for shipment to China. We can’t send the cargoes because they haven’t opened the letters of credit,’ Suharto Honggokusumo, the association’s executive director, told reporters.
He said between 60,000 and 80,000 tonnes of shipments to China had been cancelled.
Buyers had agreed to buy at US$2.8-$3 per kg, Mr Honggokusumo said but rubber prices have fallen to around US$1.8 per kg on fears that a global recession will hit demand.
The group had said Indonesia’s rubber exports were set to grow by 4 per cent this year, down from an earlier forecast of 5-7 per cent, as economic weakness dents demand from key buyers.
Demand for cars has slumped in many markets as consumers turn cautious in the face of a global financial crisis, and with more than 70 per cent of rubber sales going to the auto tyre industry, top producers Thailand, Indonesia and Malaysia are being hit.
The Agriculture Ministry has said it plans to cut production of natural rubber output by 30 per cent this year to lift slumping prices by encouraging farmers to reduce their tapping frequency to every three days instead of every two.
The benchmark rubber contract on the Tokyo Commodity Exchange for April 2009 delivery rose 12.5 yen, or 7.1 per cent, to end the morning session at 186.4 yen (US$1.92) per kg.
Earlier this week, the TOCOM rubber market reached its lowest level since July 2005 as investors abandoned riskier assets amid heightened credit concerns.
Rubber output from Indonesia is expected to grow by 4 per cent this year from 2.7 million tonnes in 2007.
Post a Comment