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Asia Rubber-Prices set to fall on rising supply, thin demand

By Apornrath Phoonphongphiphat

BANGKOK, July 30 (Reuters) - Asian rubber prices were expected to drop further due to slowing demand and rising supply, with Thailand planning to offload stocks later in the year.

"Normally the weather should be fine over the next few weeks and supply should rise substantially, so buyers are waiting to buy at lower prices," said a trader in Thailand's Hat Yai rubber centre.

Most tyremakers stayed on the sidelines as they waited for prices to fall, although an Indonesian trader said some were making small "hand to mouth" purchases.

Bridgestone Corp bought Thai RSS3 at $2.45 per kg for September delivery, while Chinese buyers purchased Indonesia's SIR20 blocked rubber at $2.18 per kg (0.99 U.S. cent per lb), traders said.

Concentrated latex was traded at $1,580 per tonne in bulk, down slightly from last week's $1,600 per tonne.

Traders said that the 210,000 tonnes of Thai government rubber stocks were pressuring prices, with the country's agriculture minister saying stocks would be offloaded later in the year.

Fine weather is forecast for Thailand's key rubber-producing southern region, allowing farmers to tap more latex.

The price of unsmoked sheet (USS3), a raw material for export-grade smoked rubber sheet (RSS3) which farmers sell to factories, fell to 69 baht per kg.

That was well below a government target price of 80 baht, prompting some farmers to threaten protests.

"We have sent a letter to the government asking for a price subsidy programme," said Boonsong Nabtong, head of the Federation of Rubber Planters Association of Thailand.

The national rubber committee is due to meet next week to seek ways to support farmers, said a senior official at the Agriculture Ministry.

But traders said the government was unlikely to implement a scheme to pay farmers at higher-than-market prices, after spending nearly $20 billion intervening in rice markets.

($1 = 31.1900 Thai baht) (Editing by Joseph Radford)