Solid Minerals
Rubber Group Urges Members to Halt Sales to Stem Price Fall
TOKYO – A woman taps a rubber tree at a plantation near Kuala Lumpur, Malaysia. Natural rubber prices have been under pressure in recent weeks. Reuters
The Southeast Asian cartel that controls the majority of the world’s rubber production urged its members not to sell the commodity to help stem a 20% plunge so far this year.
Natural rubber, used to make items from tires to latex gloves, has been under pressure in recent weeks due to increasing signs of a slowdown in China, the world’s biggest buyer of the industrial commodity.
While that is a boon for companies that buy the product, it threatens to cut the incomes of farmers who rely on the rubber crop for their main income, and who have protested in the past when prices have dropped.
After a weekend meeting, the Bangkok-based International Rubber Consortium, which helps sets production and export levels and acts like OPEC of rubber, stepped in and said prices are now “unreasonably low” given stock levels in Thailand, Indonesia and Malaysia are already low and may fall further. Less supply typically helps bolster prices because demand chases fewer stocks.
“[We] would immediately advise respective trade associations in the [three] countries to jointly encourage their members not to offer natural rubber at prevailing low prices,” said the organization, which represents more than two-thirds of the supply of natural rubber.
The statement was a confidence booster, sending the global benchmark Tokyo rubber futures up by as much as 3.0% Monday, just days after hitting a 17 1/2 month low Thursday. The market is valued at more than $30 billion a year, and is the second-largest tropical crop after palm oil, with benchmark futures traded in Japan and physical trading taking place primarily in Southeast Asia.
“Prices have fallen by so much that market sentiment was very negative, so investors just needed a government [authority] to say something,” said Gu Jiong, analyst at Tokyo-based brokerage Yutaka Shoji Co. 8747.TO +2.66%
Rubber futures on the Tokyo Commodity Exchange are still 17% lower year to date and the slump this time of the year is especially unusual as prices typically rise now because it is the so-called wintering season when rubber trees shed their leaves and output slows to a trickle.
“The low stock level would be further aggravated in the coming months with wintering expected to be severe in the three producing countries,” the organization added.
It has also said in recent days it is trying to work with Vietnam where rubber production is rising fast and presents another potential source of supply that could destabilize prices further.
Telling rubber traders though not sell at current low prices shouldn’t be a challenge as farmers tend to tap the trees less when prices are low.
Plus, many rubber farmers in Thailand have already downed tools to join political rallies in the capital against the ruling government, putting a further strain on the supply crunch. In the past they have also complained about the price of rubber, with the last major protest taking place from late August to early September last year. The Thai government has in the last few years implemented measures which included buying rubber at above market rates and providing subsidies for replanting, which reduces production in the short term.
Luckchai Kittipol, the chief executive of Thai Hua Rubber Public Co., the third-largest natural rubber exporter in Thailand, said his supply of raw material has already fallen by half.
– WALLSTREET JOURNAL
The Nigerian Government has threatened to come down heavily on foreigners sponsoring bandictory as a way of sustaining illegal mining activities in parts of the country.
The warning was handed down in Abuja by Minister, Solid Minerals Development, Dr Oladele Alake, while receiving a delegation of the Nigeria-China Chamber of Mines led by its National President, Dr. Olugbenga Ajala.
Details of these were contained in a statement released by Head, Press & PR, Ministry of Solid Minerals Development, Alaba Balogun over the weekend.
The statement cited, Dr Alake, thus, “The government will come down firmly on these unscrupulous foreign operators sponsoring banditry to perpetrate illegal mining: let me use this medium to appeal through you to tell those sponsors to desist or face the full wrath of the law.”
According to Dr Alake, the Ministry is committed to establishing a multi-agency task force that will end the activities of illegal miners and their collaborators.
The Minster made it clear that the FG had given illegal miners a 30-day-ultimatum to legitimise their businesses, quit Nigeria or incur the wrath of the law.
According to him, this will help “to streamline and structure the Small-Scale Artisanal Miners for maximum yield to the Federal Government.”
The delegation paid a courtesy call on the Minsiter at the Ministry’s headquarters in Abuja.
By Edozie Obasi-Eze
Amidst heightening uncertainties in the domestic petroleum products market characterised by scarcity and irregular pricing, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has declared that there’s no intention to review pump prices upwards.
This was contained in an advisory issued by General Manager, Corporate Communications, NMDPRA, Kimchi Apollo.
He stated that the Nigerian National Petroleum Corporation Limited (NNPCL) had imported PMS with current stock levels sufficient for 34 days.
In an attempt to address panic buying and speculations which have seen price of Premium Motor Spirit (PMS) oscillate between N180-N250 in the Lagos area, Apollo assured that there was enough quantity of the product in the country already.
He said, “Consequently, marketers and the general public are advised to avoid panic buying, diversion of products and hoarding.
“In keeping with the Authority’s responsibilities as outlined in the Petroleum Industry Act (PIA), the Authority assures the public that it would continue to monitor the supply and distribution of petroleum products nationwide, especially during this holiday season.”
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) says it is verifying and reconciling revenue collections in the Solid Minerals Sector of the economy.
The Federal Commissioner, RMAFC, Chief Tokunbo Ajasin, stated this at a strategic meeting on the commission’s 2022 nationwide monitoring of revenue collections of the Nigerian mining sector in Akure on Monday at the state Ministry of Finance Conference Hall.
This is contained in a statement by Mr Banjo Egunjobi, the Head of Media Unit of the ministry.
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Ajasin said 25 enterprises exported minerals in 2019 with no record of royalty payment, while about N2.76 billion outstanding liabilities had been established against 2,119 mining companies nationwide.
He said that this arose from failure to pay the Annual Service Fees for their company titles.
According to the Federal Commissioner, the Commission is empowered to monitor all revenue accruals from the extractive industries to ensure prompt and accurate remittances to the Federation Accounts.
He added that the monitoring was a follow-up on the 2016 exercise to assess the challenges hindering optimum revenue collection from the sector.
Ajasin said the monitoring comprised revenue collections and the activities of miners in the state.
According to him, the major issues of concern to the Commission is the Nigeria Extractive Industries Transparent Initiative NEITI 2020 report.
He added that the number of defaulting companies would be determined after engagements.
“There is also the issue of underpayment of royalty by 25 enterprises that exported minerals in 2019 with no record of royalty payments.
“These companies owe the government about N482 million in overdue royalty.
He said the 2,119 mining companies’ default nationwide arose from the failure to pay the annual service fees for their respective mineral titles.
Ajasin also said the Commission’s mandate in the extractive sector was to recover the established liabilities owed to the Federation Account.
He, therefore, urged participants to explore the opportunities in the state to harness the revenue potential in the Solid Minerals sector to boost Internally Generated Revenue.
The State Commissioner for Finance, Mr Wale Akinterinwa, stated that the process of allocating the 13 per cent derivation on crude oil paid to the states across the federation depended on the effective monitoring of revenue and the collection of established liabilities from mineral resources.
Akinterinwa noted that the cooperation given by the state Ministry of Finance, Ministry of Energy, Mines and Mineral Resources and others to enforce payment of the reported liabilities would assist in fulfilling the objectives of the exercise and a means of engaging some Strategic Revenue Drive for the state.
The commissioner said the present administration of Gov. Oluwarotimi Akeredolu would do everything at its disposal to facilitate the collection of revenue as listed in the NEITI Audit Report 2022.
He, therefore, urged stakeholders to accord full cooperation to the RMAFC team and be committed to achieving the desired goal.
Also the Permanent Secretary of the Ministry, Rev. Jide Ekpobomini, said sourcing for a quick alternative to all income was necessary and could not be overemphasised.
He said government revenue inflows would surely be boosted if the sector was vigorously harnessed.
Also his counterpart from Ministry of Energy, Mines and Mineral Resources, Mr Wemimo Ogunsanmi, said the state government had initiated a strategic mineral development plan to exploit the solid minerals sector, hence the establishment of the ministry.
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