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Indonesia rubber: buyers ignore wintering, INRO

JAKARTA: Indonesia's rubber market is expected to suffer from lethargic trading throughout the week due to low demand despite wintering and INRO's decision not to sell its stockpiled rubber in Malaysia, traders said on Monday.

March tyre-grade SIR20 softened to 31.00 U.S. cents/lb fob Palembang, Belawan and Surabaya compared with 32.50 last week. April fell to 31.25 in those centres against 32.75 and May to 31.50 against 33.00.

"Buyers are not showing any interest at all while shippers are actively offering their goods especially for nearby shipments," said one trader in Palembang, South Sumatra.

"Buyers are hiding from the market because they know there are plenty of sellers around. Also, buyers have already stocked up before the wintering takes place," he added. The Palembang trader said prices for May were even lower in his area, adding that SIR20 was traded at 31.00 last week while the present offer prices hovered at 30.75.

Traders said last week's news the International Natural Rubber Organisation decided not to sell its stock in Malaysia due to low bids would give no impact to the market this week.

"You can't expect prices to rise if there are no buyers. So who cares about wintering and INRO news," said one trader in Jakarta.

Traders said wintering, which affects the flow of latex, was taking place in North Sumatra.

Some traders earlier expected INRO's decision not to sell the stocks in Malaysia's Port Klang would help prices rebound after weeks of slow buying interest.

INRO, undergoing liquidation, had opened its warehouse in Port Klang for inspection by potential buyers. It also plans to open up its warehouse in Medan, North Sumatra on March 14.

The Medan warehouse holds some 14,000 tonnes of rubber.

INRO aims to sell 34,000 tonnes per quarter from January 2000 if market conditions allow. Sales must be completed by June 30, 2001. It has a 140,000-tonne stockpile.

INRO was formally dissolved last October after leading producers Thailand and Malaysia decided to quit the world's last producer-consumer commodity pact.

INRO has been accused of not doing enough to support prices, which it denies. Thailand is the world's largest producer. Indonesia comes second and Malaysia third. -Reuters