KOCHI: The Association of Natural Rubber Producing Countries (ANRPC), has scaled down its earlier forecast of world supply of natural rubber (NR) as it reckons that prevailing downtrend in the market is likely to pull down production further.
In its latest report, ANRPC has stated that the world supply of NR is expected to be 12.756 million tonnes in 2017, slightly lower than 12.771 million tonnes anticipated a month ago. The total global supply during January-March 2017 was short by nearly 6 lakh tonnes and it is anticipated to widen to 7 lakh tonnes by the end of June, the report said.
The supply is likely to be revised down further due to downswing in NR prices from the last week of May. The farmers may reduce the frequency of harvesting and delay reopening of tapping on the expiry of wintering-off season, the report said. The anticipated faster growth in supply in Cambodia (35.3%) and India (20.2%) are because of expected expansion of the area to be tapped during the year. ANRPC has pegged the Indian production of NR in 2017 at 7.50 lakh tonnes.
Dr. Nguyen Ngoc Bich, secretary general of ANRPC said in the May report of the association that physical prices of NR are increasingly being dominated by sentiments in Shanghai and Tokyo Commodity Exchange (Tocom) futures which are vulnerable to fluctuations in currencies, crude oil prices and geo-political developments.
The prevailing bearing trends in NR prices are due to unexpected fall in crude oil prices and sharp appreciation of Chinese Yuan and Japanese yen. Speculative investors’ expectation of an upward revision in US policy interest rates in June stands as major constraint for recovery in Asian commoditiesincluding NR, the report pointed out.