ANRPC anticipates ‘long period of deficit’ for natural rubber

Kuala Lumpur – While anticipating a balanced demand-supply position in 2022, the natural rubber economy is projected to enter into "a long period of deficit" by 2023, provided that demand grows at least at a modest rate of 3.0%. 

In its latest market analysis published 4 Nov, the Association of Natural Rubber Producing Countries (ANRPC) said the global NR economy has “almost come out” of the long period of excess production capacity and oversupply. 

“The NR economy is on the threshold of a long period of deficit, extending to 2031 and characterised by a widening mis-match between the supply and demand,” it added.

Explaining the forecast, the association said that the NR economy had witnessed excess production capacity over the past five years, mainly due to “abnormal expansion of the area occupied by mature trees.” 

While the global mature area is expected to expand by nearly 250,000 hectares in 2022, ANRPC said the increase in production is likely to be absorbed by "a robust global demand."

“Following an 8.3% increase in 2021, the world consumption is anticipated to increase at a rate between 4% and 5% in 2022,” said the ANRPC citing IMF data.

Provided that demand grows by at least 4% next year, the outlook implies that NR will not be in excess in 2022, said ANRPC adding that a 4% demand was “realistic and achievable.”

Moreover, from 2023 onwards, it is expected that NR will become globally short of supply and the deficit to be “progressively widening” through to 2028. 

“The long phase of deficit can extend further to 2031, according to the projections made on the basis of the planting trends and potential expansion of mature area in individual countries,” it added.