If natural rubber prices remain at currently low levels, rubber farmers “may permanently switch to other economic activities and this would disrupt the supply of raw materials,” says the International Rubber Consortium.
It notes that data published by the Association of Natural Rubber Producing Countries, which comprise 11 countries that produce around 93% of the world’s natural rubber, already shows some small holders are moving away from production, as production until the end of August 2015 was down 1.7% on year.
It says natural rubber prices are mainly influenced by the global economic uncertainty, slower Chinese economy and the strengthening of the Japanese yen amidst the uncertainty on the timing of interest rate hikes by the U.S. Federal reserve.
