oncern over the global output of natural rubber in 2014, coupled with the ongoing tense political situation in Thailand have pushed up the international prices of the commodity. Thailand is the world’s largest producer of natural rubber. Prices are expected to be steady to firm in the short run.
Association of Natural Rubber Producing Countries [ANRPC] reports that un-favourable weather could lead to a lower than expected supply growth in 2013, in its latest report on natural rubber trends. Supply crunch has pushed up the price of RSS-3 grade in Bangkok market by around Rs 6/kg in three weeks time. TOCOM futures trading moved on a steady note for January and February contracts. But in the long run it moved on a slightly negative mode.
Global rubber demand is poised to recover in 2014 and 2015, driven mainly by China, India and Japan, according to a report from the Economist Intelligence Unit, based in London. Demand will rise 4% each in 2014 and 2015, it said last week. So contrary to the earlier projections rubber prices likely to be firm during this month and in the first quarter of 2014.
Indonesia, world’s second largest producer has planned to cut output next year by 10%, while urging other Southeast Asia rubber-growing countries to do the same to reduce global stocks and support prices. Indonesian Rubber Association has recently issued a letter to its members to reduce production by 10% in next year.
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Indonesia’s 2013 rubber output will be little-changed at 3.1 million tones with gains hampered by wet weather and curtailed by an earlier agreement with fellow producers Thailand and Malaysia to trim exports. Indonesia, Thailand and Malaysia account for about 70% of world output, with major tyre makers that include Bridgestone Corp, Michelin and Goodyear Tire & Rubber Co taking most of their output.
Indonesia has asked Thailand, Malaysia, Vietnam, Laos and Cambodia, world’s leading producing countries to join them in the output cuts for next year. Meanwhile Vietnam, the world’s third-largest natural rubber exporter after Thailand and Indonesia, aims to keep its rubber output next year unchanged at around 1 million tones.
Global rubber prices now advanced to a two-month high as better-than-expected Chinese manufacturing data raised speculation that demand will increase from the largest consumer, and as violence inThailand stoked supply concerns.
Data released on Tuesday noted that Chinese manufacturing growth beat analyst estimates in November, indicating the nation’s economic recovery is sustaining momentum amid government efforts to rein in credit growth. According to experts if China’s import increases price might be firm during the first quarter of next year.
Source: Business Standard
