Top natural rubber producers in the world, Thailand, Indonesia, and Malaysia, have decided to cut exports in an effort to boost the price of the commodity. The meeting of Ministers of these three countries named International Tripartite Rubber Council (ITRC) at Mandarin Oriental Hotel, Bangkok on February 22, 2019, decided to trim exports by 200,000 -300,000 tonnes. These countries account for around 70 percent of Global Rubber production.
The curb, formally known as the Agreed Export Tonnage Scheme (AETS), came after the review of NR prices which was predominantly lower through 2018 and in early 2019. However, ITRC did not give a specific time period for the curb in exports. The next ITRC meeting will be held on March 4, 2019, to discuss the amount of exports each country will curb and the appropriate period for it, a joint statement said.
Benchmark rubber futures on the Tokyo Commodity Exchange hit a 27-month low in November on concerns over global oversupply, while Thai RSS3 rubber also fell to its lowest in nearly three years during the period. Besides curbing exports, the group also agreed to try to ramp up domestic use of rubber significantly in each of the three producers through developments such as rubberised roads.
The move is the sixth the group has announced plans for such export restrictions. It follows an agreement in 2017 to cut natural rubber exports by 350,000 tonnes for three months.