Blame it on the Rain
Rubber prices have reached their highest level in more than three months, in part due to concern that rainfall in key producing countries will reduce supply of the commodity. Heavy rain is expected across Thailand, the world’s number one producer, and a La Nina weather event may persist in Southeast Asia until at least the end of this year.
Showers from the heavens are not the only factor pushing prices up, however. “Some tyre makers began to buy rubber before a new tax in Thailand takes effect,” explained Gu Jiong, an analyst at commodity broker Yutaka Shoji. “From now to September 30, we will see more buyers from Asia and the US.” A higher levy on Thai exports ranging from 0.9 baht to five baht (£0.018 to £0.10) a kilogram, based on a sliding scale of free-on-board prices, will take effect from October 1, replacing the existing levy that ranges from 0.9 baht a kilo to 1.4 baht.