SHANGHAI (May 29): Thailand is unlikely to cut its rubber exports immediately, the president of the country’s rubber association said on Wednesday, further delaying implementation of a supply cut agreement with other regional producers.
Global natural rubber supplies from both output and inventories have already fallen in recent months and levels were below expectation, Chaiyos Sincharoenkul, President of Thailand Rubber Association, said at a conference, explaining the delay.
Global rubber supplies were seen at 14 million tonnes for 2019, up 2 percent from 2018, while demand worldwide is expected to rise 2.4 percent to 14.31 million tonnes, Sincharoenkul said during an earlier speech at the conference on the same day.
Demand in China, which accounts for 40 percent of global consumption, will grow 1.9 percent from the previous year to 5.78 million tonnes in 2019, Sincharoenkul also said.
Thailand’s rubber output, meanwhile, is expected to increase less than 0.9% to 4.923 million tonnes, he said.
Thailand, the world’s top rubber exporter, was supposed to start cutting exports on April 1, along with Indonesia and Malaysia, the date agreed by the International Tripartite Rubber Council (ITRC), made up of the three countries, back in March.
The Southeast Asian nation later said it would delay its cut of rubber exports until the four months of May 20 to Sept 19.
Besides curbing their exports, the members of ITRC also agreed to try to significantly ramp up domestic use of rubber in their respective countries.
Thailand has taken measures like switching rubber to other crops and halting rubber tapping temporarily to cut supplies of the commodity, Sincharoenkul said.
Thailand also aims to boost domestic consumption to 1 million tonnes, accounting for 20% of the total national output, according to Sincharoenkul.
Thailand has implemented measures including increasing rubberized road projects and using rubber floors for sports and playground to boost consumption, Sincharoenkul said.