Top rubber producers plan to sharply hike prices, stop SICOM delivery

SINGAPORE, April 22 (Reuters) - Big Asian rubber producers, including world No. 1 Sri Trang Agro-Industry Plc, are set to hike prices sharply, ditching a system of pegging prices near a benchmark set by the Singapore SICOM exchange.

The producers plan to charge a significant premium over the exchange-traded futures contract from the second half of 2015, a move that marks a radical pricing change in an industry where plummeting prices have hit farmers badly.

"Prices of SICOM no longer reflect the real cost of rubber production," a spokesman from Thailand-based Sri Trang told Reuters in an email, adding the company would also stop delivery to the bourse.

Singapore Exchange, which owns SICOM, was not immediately available for comment.

The move by Sri Trang was similar to plans by another major rubber producer, Halcyon Agri Corp Ltd.

Halcyon Chief Executive Robert Meyer said other Indonesian producers have done the same.

"There is a dislocation between SICOM prices and actual physical prices," Meyer told Reuters in an interview. Physical rubber prices are already 3-4 cents per kilogram higher than SICOM prices, he said.

Halcyon Agri and Sri Trang together account for nearly a fifth of global rubber output.

Other Thai growers Southland Rubber, Thai Hua Rubber and Sri Trang affiliates Rubberland Products and Num Hua, have informed the Thai Rubber Association they are taking the same steps, the industry group said in a statement to Reuters. (Reporting by Manolo Serapio Jr. and A. Ananthalakshmi; Editing by Joseph Radford)