Rubber output likely to be slow next year on rain, prices

Growth in natural rubber production in key growing countries may slow next year, as heavy rains disrupt tapping and declining prices prompt growers to cut supply, according to the Association of Natural Rubber Producing Countries.

“Weather impacts and prices influence the trends of natural rubber supply,” Kamarul Baharain Basir, secretary- general of the Kuala Lumpur-based association said in an interview today. Prices move down following economic trends, driving producers to cut supply in response to declining demand, he added.

Production from its member countries, representing 92 per cent of global supply, may expand 3.7 per cent to 10.4 million metric tons next year. That compared with a revised growth of 5.6 per cent to 10 million tons this year, Kamarul said on a sideline of the Global Rubber Conference in Phnom Penh.

 

Demand from member countries, which accounts for 57 per cent of global consumption, is estimated to rise 2.9 per cent next year to 6.3 million tonnes, he added.

Demand Concerns
Declining supply will help support rubber futures which have tumbled 37 per cent this year, as Europe’s deepening sovereign-debt crisis and the worst floods in almost 70 years in Thailand, which disrupted car production in Asia and North America, raised demand concerns.