Natural rubber supply rises 4% amid flat demand

Kuala Lumpur – Natural rubber production rose 4.2% year-on-year in August to reach 1.37 million tonnes, the Association of Natural Rubber Producing Countries (ANRPC) has reported.

Global demand, meanwhile, remained fairly flat with a 0.2% increase to just under 1.3 million tonnes, according to ANRPC data published 2 Oct.

The NR market started August "with scepticism" amid ongoing geopolitical tensions and rising US interest rates, noted the association's latest monthly review.

An imbalance between NR production and demand also weighed on physical and futures markets during the first half of the month, ANRPC also pointed out.

Markets, however, strengthened progressively in the second half of August on optimism about the economic outlook of major consuming nations and improved market sentiment.

Going forward, ANRPC said “hawkish” US interest rate policy, the Russia-Ukraine war, China-US tensions and global economic uncertainty are likely to negatively impact the market.

On the other hand, the NR producers' association noted a number of positive developments that could significantly support market growth.

These factors, it said, includes faster growth in demand compared to output, optimism regarding the economies of China and India and crude oil price trends.