Kuala Lumpur – Global demand for natural rubber (NR) is set to grow at 2.8% in 2018, considerably higher than 1.2% observed during 2017, according to the Association of Natural Rubber Producing Countries (ANRPC).
ANRPC expects 2.8% growth in NR demand this year
Contributing to this growth, said ANRPC, are an improving global economy, and the expected impact of recently approved changes to US taxation policy.
Furthermore, the outlook for commodity market prices is expected to strengthen during 2018, due to oil production cuts by OPEC and political tensions in the Middle East.
However, global supply of NR, 90% of which is fulfilled through ANRPC members, is also set to rise 4.5% to 13.784 million tonnes in 2018, the association said.
The growth rate in production is slightly less than the previous year’s growth rate, which stood at 4.7%.
The slower rate was mainly attributed to a lower production anticipated by Thailand at 4.375 million tonnes, down by 1.2% on a year-to-year basis.
Reviewing market performance in January, ANRPC said an early wintering season faced by rubber farmers in China had slowed production.
The same seasonal factor will soon be seen in other major producing countries, predicted ANRPC.
“Slowdown in NR supply may be expected, and this may lead to a much-balanced supply-demand NR market in the coming months,” the association concluded.