NR supply to grow in 2011, but demand slows

ERJ staff report (LMH)

Kuala Lumpur - Natural rubber supply from the 11 members of the Association of Natural Rubber Producing Companies could grow by 6 percent this year but demand will not grow at the same rate, according to ANRPC's Oct NR trends and statistics report.

Thailand is expected to produce 3.375 million tonnes of NR this year against 3.350 million tonnes previously forecast. And in Malaysia, the country's supply has been revised to 1.021 million tonnes, ANRPC said. The Malaysian government had predicted 1 million tonnes. ANRPC noted that although supply in Indonesia has increased by 10.3 percent during January- October, the government has not revised the forecast for the year.

ANRPC said its total supply for the year is now expected to be 10.059 million tonnes, up 6 percent from 2010.

The report also noted that demand for natural rubber from China, India and Malaysia, which together account for 45 percent of global demand, is expected to grow by only 0.7 percent this year compared to 4.7 percent in 2010.

“Natural rubber market has not been immune to the bearish trend in markets world over caused by the current global economic slowdown. Almost every day we are hearing disturbing economic news from various regions and sectors,” said Dato Dr Kamarul Baharain Basir, secretary general of ANRPC.

He commented, “China's third-quarter GDP has slowed down to 9.1 percent from 9.5 percent in the second-quarter. Moreover, the China Association of Automobile Manufacturers has brought down its forecast on overall auto sales-growth this year to 3 percent from a previous forecast of 5 percent and earlier expected 10 percent to 15 percent. The above developments have weighed on prices of natural rubber. The market may continue to lack momentum as far as global economy keeps the current slow pace.”

The 11 member countries of ANRPC include Papua New Guinea, Phillippines, Singapore and Sri Lanka, as well as those countries named above. The full report is available from the ANRPC.

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Report from ANRPC