Sept. 4 (Bloomberg) -- Rubber retreated from a three-month high on concern that a U.S. strike against Syria may hurt investment demand for risky assets, offsetting speculation that Thai farmers may disrupt shipments from the largest exporter.
Rubber for delivery in February lost 1 percent to settle at 281.4 yen a kilogram ($2,823 a metric ton) on the Tokyo Commodity Exchange. Earlier, the price advanced as much as 1.3 percent to 287.9 yen, the highest since May 23.
U.S. House of Representatives Speaker John Boehner backed President Barack Obama’s call for action against Syria while leaders of the Senate’s foreign-relations panel agreed on a proposal backing military strikes. The possible assault follows Syria’s alleged use of chemical weapons against its citizens.
“Market participants are worried about the Syria case, which could accelerate a risk-off mode,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo.
In Thailand, farmers have held protests in the south to try to pressure the government to subsidize prices. Finance Minister Kittiratt Na-Ranong said yesterday that the government will not consider paying farmers a guaranteed price for rubber for now.
“Protests by Thai farmers raised concerns shipments from the country will be disrupted,” said Hideshi Matsunaga, an analyst at broker ACE Koeki Co. in Tokyo.
The Thai cabinet approved proposals from the rubber policy committee to help subsidize production costs for small growers, according to the minister.
Thai rubber free-on-board added 0.6 percent to 86.40 baht ($2.68) a kilogram, according to data from the Rubber Research Institute of Thailand. The contract for January delivery lost 1.6 percent to close at 20,690 yuan ($3,381) a ton on the Shanghai Futures Exchange.
--Editors: Jake Lloyd-Smith, Thomas Kutty Abraham