The key Tokyo rubber futures contract slipped lower on Thursday as players took profit after recent rises, but prices were still supported by seasonal falling supply and the Thai government intervention, dealers said. The benchmark rubber contract on the Tokyo Commodity Exchange edged 0.2 yen lower to settle at 323.8 yen ($4.1) per kg. It rose to an intra-day high of 324.6 yen, near a 3-month high, before profit-taking set in.
"TOCOM prices were trapped in a narrow range for a while so it was an appropriate time to take profit after the recent rises," one dealer said. TOCOM prices are expected to rise further after breaking through the key psychological level of 320 yen, dealers said, and a government scheme to support farmers, combined with falling supply and firm crude, should help.
The Thai government approved a 15 billion baht ($474 million) plan to buy rubber from farmers at 120 baht per kg to support prices. Rubber supply was expected to drop significantly from late-January due to the dry season in Thailand, the world' biggest rubber producer.
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