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| Asian Nations Join To Prop Up Prices |
| 2008-11-02 |
| As agricultural commodity prices plunge, Asia's exporters are increasingly looking to joint international action to support values, but many of the forces driving down prices appear to be beyond even multilateral control. "Governments can't do much," said Mahfuz Ahmed, an agricultural economist at the Asian Development Bank in Manila. "They could not control the price increases earlier in the year and they can't control the price fall." The Reuters/Jefferies CRB Index, which measures commodity prices, is down 42 percent from its all-time high in early July, at levels last seen in December 2004. Asian governments have had to switch their concerns from poor consumers who were having trouble affording food to farmers who are seeing their incomes plummet. Thailand, Indonesia and Malaysia, which produce about 80 percent of the world's natural rubber, got together this week to look for ways to shore up prices, which have fallen by almost half since June, leading to a number of buyers defaulting on their contracts. Indonesian exporters on Wednesday canceled more than 60,000 tons of rubber shipments after Chinese buyers refused to pay agreed-to prices. The three countries arranged to accelerate their program to cut down old rubber trees, reducing rubber production by about 210,000 tons, news that led to a 9 percent surge in rubber futures on the Tokyo Commodities Market. But the cut represents just 2 percent of world production, and with the rapid cooling in the automotive industry -- tires account for 85 percent of global rubber consumption -- the agreement's long-term effects are likely to be limited. |
| Posted by:Fred |
| #3 Also hurting the ability of farmers in the United States to pay their interest rates. How about a bailout? |
| Posted by: bman 2008-11-02 11:15 |
| #2 Lol! Go ahead and make it worse on yourselves. You're gonna wish you had those trees instead of a short bump in prices. |
| Posted by: Mike N. 2008-11-02 02:03 |
| #1 "'Governments can't do much".... 'They could not control the price increases earlier in the year and they can't control the price fall.'" Dang! An honest man. That won't last long.... |
| Posted by: Barbara Skolaut 2008-11-02 00:08 |