IRCo's Daily Composite Price (DCP) averaged at 190.33 US cents/kg. and stayed above the 190.00 US cents/kg. level for the majority of the period under review. Out of a total of 66 trading days during the period under review, the DCP was above the 190.00 US cents/kg. level for 37 trading days, out of which it was above the 200.00 US cents/kg. level for 25 days.

It began on the first trading day of the period at 160.56 US cents/kg. and breached the 200.00 US cents/kg. level on 27^th August and remained above this level to close the period at 212.25 US cents/kg. with a record high on 10^th September at 217.11 US cents/kg. whilst its lowest was at 159.00 US cents/kg. on 13^th July.

Tabulated below comparative highlights of the DCP movements for the first three quarters of 2009:

The DCP 14-Day Moving Average tracked the recovery in the rubber prices to breached the 170.00 US cents/kg. level on 30^th July at 170.51 US cents/kg. It opened up at 160.11 US cents/kg. and closed at 212.10 US cents/kg. Its high was recorded at   212.26 US cents/kg. on 28^th September and its low on 9^th July at 159.47 US cents/kg.

The world rubber economy depends heavily on the world economy, which was beginning to pull out of a recession unprecedented in the post-World War II era, but stabilization is going to be uneven and the recovery is expected to be sluggish.

The stable recovery of physical natural rubber prices were supported mainly by the steady purchases by Chinese buyers and major tyre makers and the lingering tightness in supplies due to inclement weather in major producing countries.

Among the notable factors that influenced the physical rubber market and prices during the period under review include:

1. Chinese buyers continued to be active for the quarter under review except for the month of August where Chinese imports were noticeably reduced as domestic manufacturers switch to buying cheaper NR stocks in domestic warehouses.

2. The strong sentiment in the physical market remained intact except for a single day price dip on 14 September after the USA announced the imposition of added duty on Chinese-made tyres.

3. Chinese imports for the first half of 2009 increased by 19%. However, imports by the EU, Japan and USA fell by 44%, 27% and 35%, respectively, over the same period, reflecting the continuing slump in these advanced economies.

4. For the first time ever, imports of natural rubber by India crossed the 100,000 tons mark in September 2009, as compared to 79,927 tons during the previous financial year. This was attributed to the price advantage across the world, excluding India, and industry sources expect over a 100% rise, to 150,000 tons, in the overall imports during this fiscal year.

5. Data released for the first half of 2009  showed that global natural rubber production declined by 7.4% from the same period in 2008 to 4.219 million tons, whilst consumption declined by 11.7% to 4.539 million tons.

6. Exports from the major producers, except for Vietnam, continued to fall in the first six months of 2009 compared to the same period in 2008. However, the rate of deceleration was lower in the second quarter compared to the first quarter.

7. Global stocks of natural rubber as at end of June 2009 was reported to be at  759,000 tons, just about one-third of the optimum level which is about two and a half months of annual global consumption.

8. For the Tripartite Countries, for the first half of 2009, production for Thailand declined by 12.4% to 1.304 million tons, for Indonesia by 5.6% to 1.341 million tons and for Malaysia by 31.7% to 383.6%. Gross exports too declined by 10.4% to 1.195 million tons, by 13.0% to 1.065 million tons and by 38.9% to 0.309 million tons for Thailand, Indonesia and Malaysia, respectively.

9. Inclement weather continued to be the major contributor to the tightness in supply. Unexpected wet spells in the main producing areas of Thailand and Malaysia have adversely affected production. In the case of Indonesia, production was lower because of the normal wintering season in Southern Sumatra and Kalimantan. .

10. Prices of crude oil were firm and steady during the period under review, reflecting the expectation of a recovery in the global economy with prices on the NYMEX hovering between a low of US 59.52 per barrel and a high of US $ 74.37 per barrel.

11. The US dollar weakens against most major and regional currencies, thus boosting physical rubber prices quoted in US dollar terms. For the period under review, the Thai Baht improved by 0.48, the Indonesia Rupiah by 560 and the Malaysian Ringgit by 0.05 whilst the Japanese Yen improved by 7.02. 

The following table shows the movement of prices at the various rubber markets during this quarter:

Price Movements at Major Rubber Markets

3^rd Quarter 2009

       (Note: Denoted in US currency except for Shanghai)