Key Tokyo rubber futures fell more than 6 percent on Tuesday, tracking a slide in oil prices that outweighed a Thai government plan to shore up rubber prices. By 0035 GMT, the key Tokyo Commodity Exchange rubber contract for June delivery fell as low as 140.0 yen a kg, down 9.7 yen or about 6.5 percent, before inching up to 141.2.
Rubber futures had jumped 4.6 percent on Friday as oil prices gained. Tokyo financial markets were closed on Monday for a national holiday. Oil fell nearly 8 percent on Monday, dragged below $38 by the growing impact of the economic recession on global energy consumption. US crude settled at $37.59 a barrel on Monday. Oil prices extended losses in electronic trade on Tuesday, down $0.37 to $37.22.
US jobless data released on Friday offered further evidence of the severe global economic state, with US unemployment rate hitting its highest level in almost 16 years. In an effort to shore up prices, the Thai government plans to buy up to 100,000 tonnes of rubber from the market this year and keep it in stock, agriculture ministry sources and industry officials said on Monday. Only last month, the world's top three rubber-producing countries Thailand, Indonesia and Malaysia agreed to cut their 2009 rubber exports by a sixth, or 915,000 tonnes, to prop up prices.