Kochi, India – The Association of Natural Rubber Producing Countries (ANRPC) has revised its earlier forecast of global supply outlook of natural rubber (NR) for 2016 and has said the prices may not rise in the next three months.
ANRPC has based the latest report on the monthly production in major rubber producing countries in the first five months ended May 2016. The revised prediction suggests that the total supply could grow at a much slower rate of 0.3 percent during 2016 compared with the growth of 0.8 percent registered in 2015 and 5 percent in 2014. According to the association, of the member countries which account for 90 percent of total global NR supply, the anticipated total NR volume available in 2016 is 11.075 million metric tons, slightly higher than 11.042 million metric tons in the previous year. In May, ANRPC had predicted the NR global supply in 2016 will touch 11.166 million metric tons, up by 1.1 percent over the previous year.
The association scaled down its forecast as the production in the member countries for the five months ended May 2016 stood at 4.080 million metric tons, just 0.3 percent up from the same period a year ago. ANRPC secretary general Sheela Thomas said in the monthly report of the association that the drop in average yield across the countries has offset the potential gain in supply from the substantial expansion in yielding area. She said the demand will stay weak due to prevailing global uncertainties. Anti-dumping and countervailing duties by the U.S. on certain auto tires originating from China will hit the demand from China. Though negative sentiments arising from the anticipated low demand are expected to be absorbed by virtual zero growth in supply, uncertain crude oil outlook and weak currencies of major NR exporting countries keep sentiments down in the NR market.
“To sum up, NR prices lack any solid support from demand-supply fundamentals or non-fundamental factors at least for the next three months,” Sheela Thomas said, adding that an encouraging trend in the midst of all the uncertainties is the accelerated growth observed in domestic consumption of NR in major NR exporting countries. Thailand is the largest producer, accounting for 36 percent of the global output, while Indonesia with a 26 percent share comes second. India currently stands sixth among the NR producers after Vietnam, China and Malaysia.
