Thailand, Indonesia set minimum price for rubber

BANGKOK: Exporters in Thailand, Indonesia and Malaysia that represent 70% of global supply agreed to set a minimum price for natural rubber at $3 per kg, Thai Rubber Association President Pongsak Kerdvongbundit said.

"The three associations agreed not to sell rubber below the minimum price after a sharp fall" in futures, Pongsak said on Friday. Rubber plunged 16% this month on the Tokyo Commodity Exchange as Europe's sovereign-debt crisis threatened demand and floods in Thailand cut automobile output, reducing tyre consumption.

Thailand, Indonesia and Malaysia will meet next week to discuss measures to stem slump in prices, and they may delay latex tapping and limit shipments to keep export prices above $3.50 a kg, according to Thailand's Ministry of Agriculture and Cooperatives. They will cut down more aging trees, boost replanting and increase stockpiles, it said.

Demand remains strong and there is no significant change in production, Pornsak Jarernprasert, deputy farm minister, said in a statement.