Q4 global natural rubber supply seen down 6.3%

Kochi: Global natural rubber supply is expected to slip 6.3 per cent during the fourth quarter – October-December.

Based on lower production estimates from major producing countries such as Thailand, India and Vietnam, the Association of Natural Rubber Producing Countries (ANRPC), which accounts for 92 per cent of the global rubber output, has further pruned rubber production estimates. Earlier, it had projected a shortfall of 3.8 per cent for the quarter.

According to the latest estimates, Indian rubber production is expected to fall 4.6 per cent from 1.8 per cent for the quarter. Vietnam, which was expected to register a growth of 3.8 per cent, is now expected to witness a fall of 2.8 per cent.

However, Thailand is expected to witness the sharpest fall of 33.4 per cent, down from the earlier 28.4 per cent. Thailand, Vietnam and India are the only three countries that will record negative growth in the fourth quarter.

Consequent to this revision, the global growth in natural rubber supply this year is expected to be contained at 5.7 per cent, lower from the 6.6 per cent expected earlier. The projection of accelerated global supply growth is based on output increase of 17.9 per cent registered in the first quarter, 2.8 per cent in the second and 12.3 per cent in the third.

The global natural rubber production, mainly from ANRPC countries, is now estimated at 9.422 million tonnes (mt) this year. This is expected to increase 5.3 per cent to 9.918 mt next year, provided there is not much variation in global weather conditions.

India has scaled down the country’s expectation of natural rubber supply growth to three per cent this year at 845,000 tonnes. Reports till last month had indicated that rubber supply would grow by four per cent to 853,000 tonnes. The country’s supply has been badly affected by unseasonal rains in the fourth quarter, which also happens to be the flush season for natural rubber supply, the ANRPC said.

However, the Rubber Board now anticipates India’s yielding area to expand by 14,000 hectares as area under rubber which was planted seven years ago has now become productive. This is expected to accelerate production by 5.3 per cent to 890,000 tonnes. The constraints on India’s natural rubber production are characterised by long lean season spanning seven continuous months with low output.

The leaf shedding season also results in production dip which can last in the summer months. The onset of the South-West monsoon also affects tapping operations and rubber output during June-August. In effect, rubber output during the lean months can come down by 50-60 per cent of the peak production period, the ANRPC said.

Consumption of natural rubber by major consuming countries is also expected to rise this year. Between them, countries such as China, India and Malaysia account for over 48 per cent of the global rubber consumption. Consumption by China is expected to increase 8.6 per cent during the current year, while India is expected to register a growth of 5.1 per cent and Malaysia 2.2 per cent.

India is expected to top in imports, estimated at 14 per cent, while China is likely to register 10 per cent growth even as Malaysia’s imports are expected to slow down by 5.3 per cent, the ANRPC said.

(The Hindu Business Line)

ANRPC sees world rubber supply tightening in Feb-May

Mumbai (Reuters): The tight natural rubber supply situation in the world market “is likely to be aggravated further” in February-May 2011, the group responsible for 92 percent of global output said, as it is seasonally the lean period for tapping.Spot rubber price in Thailand, the world’s biggest producer, has risen over 70 percent to a record high of $4.96 in 2010, after heavy rains trimmed supplies in the key producing countries that include India and China.

“As consuming industry normally goes for large volume purchases before the supply enters wintering lean season starting end of February, the demand is likely to gain further momentum in January,” the Association of Natural Rubber Producing Countries (ANRPC) said in a monthly statement on Friday.

Key Tokyo rubber futures hit a record high on Friday in a holiday-thinned market, with sentiment helped by tight supply and a rise in oil prices to above $90 a barrel the day before.

ANRPC also cut its natural rubber production growth estimate for 2010. It now expects supply to grow 5.7 percent to 9.422 million tonnes, compared with its prior expectations of a 6.6 percent rise.

Supply in 2011 is likely to rise by 5.3 percent to 9.918 million tonnes provided weather remains normal, the group said.