Global natural rubber output likely to rise 5% this year

The supply crunch in the global natural rubber market may be less this year, as production is expected to increase five per cent. Supply is expected to be smooth for the next four months. Thus, prices may rise, with major producing countries entering their main production season.

Global rubber production rose 4.9 per cent in the first quarter (April-June) of the current financial year, according to the latest data of the Association of the Natural Rubber Producing Countries (ANRPC). Earlier, the increase had been pegged at 3.3 per cent. The production rose to 2.9 million tonnes (mt), as against 2.1 mt in the same period last year.

ANRPC’s total supply anticipated for this year (January-December) stands almost unchanged at the previous estimate of 9.96 mt, up five per cent over that the year before.

Thailand will be the largest supplier with a production forecast of 3.3 mt, followed by Indonesia (2.9 mt) and Malaysia (975,000 tonnes). India will be the fourth with 901,000 tonnes.

In April, global production was 628,000 tonnes and in May, this was 718,000 tonnes. According to the preliminary estimates, the production in June increased 5.3 per cent over that in June 2010, to 842,000 tonnes.

The production estimated for the next quarter (July-September) is 2.7 mt, compared with an actual production of 2.6 mt in the same period of 2010 — an increase of 3.3 per cent. The latest production estimate is 861,000 tonnes for July, 919,000 tonnes in August and 989,000 tonnes in September — an expected growth of 2.9 per cent each in July and August and 4.2 per cent in September. For October, 3.8 per cent increase has been projected. Production is estimated to increase in November and December, too, due to favourable climate. So, with adequate supply ensured, prices are expected to remain low.