ANRPC forecasts NR shortage from 2016 onwards

ERJ staff report (DS)

Kuala Lumpur -- In its July issue of Natural Rubber Trends & Statistics, the Association of Natural Rubber Producing Countries ANRPC) says NR pries are recovering hesitantly on low supply, the weak dollar and high oil prices. However, the group warns, "The years from 2016 are expected to witness marked slowdowns in global supply of NR. These figures clearly indicate that the present tightness in NR supply would be continued and the commodity would be in deficit through 2018 even if the demand grows only moderate rates."

The group said, "Total supply of NR from member nations of the ANRPC is likely to grow on year by 3.4% in the third quarter (July to September) as against 10.5% and 3.3 % rates attained during the first two quarters respectively. Supply had posted a 12.1% growth during the previous year's third-quarter."

In reference to China, the data shows the year-long slowdown in demand for NR in China is coming to an end "China's import demand for NR (Including rubber compounds containing more than 95% NR) is anticipated to fall annually by 5.4% during the third quarter of this year." It added, "The import volume during this year's third-quarter is anticipated at 695,000 tons as against 735,000 tons imported during the same quarter in the previous year. During the first quarter of this year, the import volume stood at 664,000 tons, but fell to 641,000 tons in the second quarter."

China's consumption of NR (Including rubber compounds containing more than 95% NR) is estimated to have fallen 4.7% on year during the second quarter of this year. However, a 1.8% year-on-year rise in consumption is expected during the third quarter.

With this background, ANRPC said, "The short-term outlook on natural rubber market is clouded by significant uncertainty and risks from the U.S. debt negotiations and continued concerns about the euro-bloc's debt crisis."

The body says there are six significant factors keepingprices low, but an equal number of factors driving prices higher.

After re-examining area ubnder rubber, planting rates and yields, te group says, "The likely scenario, as given in the above table, indicates that the supply growth would be marginal during 2012 (Between 2.8 % and 3.8%). Although the growth is anticipated to accelerate slowly from 2013 onwards, it could reach only up to around 6% by 2015. The years from 2016 are expected to witness marked slowdowns in global supply of NR. These figures clearly indicate that the present tightness in NR supply would be continued and the commodity would be in deficit through 2018 even if the demand grows only moderate rates."

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July 2011 issue of Natural Rubber Trends & Statistics from ANRPC (Access to the publication is limited only to those who have paid a subscription to the ANRPC.  The subscription fee is RM1000 (USD 335) only

for 12 issues from January to December 2011.)