Thai rubber futures closed higher on Monday as players bought contracts on concerns about tight supply due to rain, brokers said. Overall volume surged as 120 contracts of ribbed smoked sheet number three (RSS3) were traded compared to 23 on Friday.
"Players bought contracts on fears that prices would rise further as rain in southern Thailand interrupted tapping," said one broker.
Thailand's south produces about 90 percent of its natural rubber and the traditional peak period of production is from June to September.
Rain usually starts falling in October and trims supplies as farmers face difficulties going out to tap trees.
The most active March contract ended at 51.6 baht per kg, up from Friday's 51.2 baht, with 41 RSS contracts traded compared to two. Brokers said they expected futures prices to rise further, tracking physical prices.
On the physical front, USS3, the raw material for export-grade rubber sheet, was quoted higher due to the rain. It was at 46.92 baht per kg, up from 46.85 baht. On Thailand's Hat Yai physical market, RSS3 was quoted at 48.26 baht per kg, up from 48.12 on Friday.
On Singapore's SICOM, RSS3 December contract was steady at $1.26.
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