World Rubber Prices Seen Improving

World natural rubber prices are likely to increase by the end of this year or early in 1998 after falling to three-year lows in recent weeks, a senior economist said.

Prices would rise further up to the end of the century, after which a global supply deficit would send the market surging, Hidde Smit, managing director of Amsterdam-based Economic and Social Institute, said late on Thursday.

He told an international rubber forum that the market was expected to absorb at attractive prices 7.5 million tonnes of natural rubber by year 2000 and 11 million by 2020.

Singapore RSS1 prices are currently hovering well below S$2 a kg. Smit said prices could rise to more than S$2.50 in 1998 and surpass the $3 mark by 2003. He said at S$2.60 a kg, rubber could face a supply deficit of one million tonnes in 2005.

 

World consumption was expected to be driven by soaring growth in vehicles and robust economic expansion in Asia. But production in three Asian countries -- Thailand, Indonesia and Malaysia, the three biggest growers -- could stagnate as they became more industrialised.