The strengthening of rubber prices continues in the third day of consecutive trading on Tuesday (05/12/2017), amid concerns over the outlook for supply of this commodity.
The price of rubber for delivery in May 2018, the most-active contract on the Tokyo Commodity Exchange (Tocom), rose 0.76% or 1.60 points to 210.90 yen per kilogram (kg) at 1036 GMT.
Earlier, the May contract rubber price opened with a 0.62% rise at 210.60 after trading on Monday (4/12/2017) ended up 2.85% or 5.80 points at 209.30 yen per kg.
According to Gu Jiong, an analyst at commodity trading company Yutaka Shoji, rubber prices are buoyed by concerns about inventories amidst export cuts by exporters.
"In addition to flooding in Thailand as well as last weekend's fires in the rubber warehouse in Shanghai," Gu Jiong said, as quoted by Bloomberg.
Indonesia, Malaysia and Thailand are rumored to be reimposing the rubber export restriction scheme in December 2017 to lift the price of the commodity in the global market.
The three major rubber producing countries that are members of International Tripartite Rubber Council (ITRC) consider the impact of the world rubber price decline, especially for the welfare of small farmers.
Therefore, for the fifth time the Agreed Export Tonnage Scheme (AETS) scheme or export trimming will be implemented in December 2017.
As is known, ITRC consists of three major rubber producing countries, namely Thailand, Indonesia, and Malaysia. Thailand is the largest rubber producer in the world with a total production of about 4.1 million tons.
Meanwhile, Indonesia is in second position with output of 3.1 million tons, followed by Malaysia in third position with 720,000 tons per year production.
Also boosting the yen, the yen was down 0.13% or 0.15 points to 112.56 per dollar at 1041 GMT, after Monday (4/12) ended up depreciating 0.21% at 112.41 .
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