ANRPC: Natural rubber production impacted by flooding, tree disease

Kuala Lumpur – World consumption of natural rubber grew 5.2% in the first seven months of 2018, compared with growth of 3.7% in world NR supply, according to the Association of Natural Rubber Producing Countries (ANRPC).

World NR production totalled 8.16 million tonnes in January-July 2018, and production stood at 7.37 million tonnes, for a total production shortfall of 786,000 tons, ANRPC secretary general Nguyen Ngoc Bich wrote in his 23 Aug letter prefacing the association's July report.

"Unfavourable weather conditions and prevailing low rubber prices have resulted in a production fall in Malaysia, Vietnam, India and Sri Lanka during the first seven months of 2018," Nguyen wrote.

Vietnam saw the biggest drop in production during the period, at 17.6%, according to the report. Malaysian production fell by 16.5%, Sri Lankan production by 10.3% and Indian production by 8.5%, it said.

India is seeing the worst flooding in its NR-growing region since 1924, the ANRPC said. Also, both India and Vietnam are suffering an outbreak of leaf and bark diseases, it said.

However, other NR-growing countries saw an increase in production over the seven months – Thailand by 10%, Cambodia by 15.7%, China by 9.2% and Indonesia by 6.3%, the report said. Production in The Philippines grew by 10.5%, largely through expansion of the area planted with mature Hevea trees, it said.

The ANRPC currently projects a 5.2% increase in world NR production in 2018, to 14.04 million tonnes, according to the report. But continued flooding may cause some countries to revise their yearly estimates downward, it said.

As for NR consumption, China — representing 40%of world demand — remained the world's biggest NR consumer in January-July 2018, the report said.

However, the 2.8% growth in Chinese demand, to 3.228 million tonnes, was below expectations, it said.

A slowdown in Chinese manufacturing, caused by concerns over higher US tariffs on Chinese tires and rubber products, was the main cause of softer NR demand, according to the ANRPC. However, an increase of 12.2% in NR demand in India mitigated the loss in Chinese demand, it said.