Global natural rubber (NR) demand is likely to increase this year, according to the initial trend in consumption. A high crude oil price may also positively impact demand world over, according to experts. This is so because an alternative for natural rubber, synthetic rubber (SR), is produced from crude oil derivatives and its prices take a cue from crude oil prices. This may also lead to a shift in the ratio of NR-SR consumption in favour of NR.
In India, the demand is anticipated to rise 3.1 per cent year-on-year during Q1. The consumption sector in India depends heavily on domestic demand, especially from the automobile industry, largely driven by the country’s economic trends. An improved economic outlook announced by the government in March, through its Economic Survey, offers scope for a faster growth in consumption of NR during this year. The country’s consumption is expected to rise 4.7 per cent this year, much faster than the 1.4 per cent rate attained in the previous year.
In January-March, consumption was up 2.1 per cent to 1.4 million tonnes (mt), according to the latest ANRPC data. According to preliminary estimates, the average monthly consumption, which stood at 448,000 tonnes during January and February this year, is likely to rise to 516,000 tonnes in March and to 534,000 tonnes during April-May.
The anticipated growth in global demand would be mainly driven by countries which fall outside the Association of Natural Rubber Producing Countries (ANRPC), which include the US and Japan.
NR consumption by member countries of ANRPC rose 1.9 per cent in 2011 over the previous year. Eleven member countries, including China, India, Malaysia and Thailand, together consumed 6.16 mt, as against six mt in 2010.