Supply constraint till 2012

Natural rubber supply will be constrained until at least until 2012 as production won't keep pace with rising demand from China and India, according to the International Rubber Study Group.

Output in Malaysia, the world's third-biggest rubber producer, is likely to fall below 1 million metric tonne by 2020 from 1.2 million tonne this year as farmers cut down rubber trees to plant oil palms, Hidde Smit, secretary-general at the group, said yesterday in a conference held in Sanya, China.

Rubber prices have more than doubled since 2002, prompting farmers in Thailand and Vietnam, the world's largest and fifth- largest producers, to plant more trees.