Global production declines 5%.
Kochi, Feb. 2
Adverse weather conditions and falling yields resulted in the country's rubber production declining 7.3 per cent in 2009. Though rubber-yielding area increased modestly by 3,000 hectares last year, a fall in yield from 1,903 kg/hectare in 2008 to 1,753 kg/hectare was the principal reason for the drop in production. Going by the current trend, rubber production is expected to rise to 8.53 lakh tonnes in 2010 from the estimated 8.17 lakh tonnes in 2009.
The total supply of rubber among the member-countries of the Association of Natural Rubber Producing Countries (ANRPC) fell 5.1 per cent to 8.68 million tonnes in 2009 against 9.15 million tonnes in 2008. The ANRPC consists of eight major rubber-producing countries that together account for 93 per cent of the global natural rubber production.
The natural rubber industry is currently passing through a situation of tight supply caused by a progressive decline in production and marked rebound in demand as global economic development accelerates. The ANRPC has said that rubber prices are poised to remain bullish in the coming months and farmers stand to benefit from the firm trends.
With wintry conditions prevailing in some of the producing countries pulling down production and a firm trend in crude oil prices, supply side constraints are likely to persist in the global rubber markets.
Aggregate rubber yielding area in Thailand, Indonesia, Malaysia, India, Vietnam, China, Sri Lanka and Cambodia expanded to 7.125 million hectares in 2009. But the average aggregate yield fell to 1,219 kg/hectare from 1,304 kg/hectare in 2008. The primary reason for the fall in yield was due to adverse climatic conditions over most of the rubber-growing regions last year, the ANRPC said.
Steepest fall
Malaysia witnessed the steepest fall of 22 per cent in production. The rubber yielding area in the country shrank 20,000 hectares last year while the average annual yield dipped to 1,128 kg/hectare from 1,411 kg/hectares in 2008. The next highest fall was recorded by India at 7.3 per cent. Thailand witnessed a fall of 6.1 per cent, while production in Indonesia dropped 5.7 per cent.
Even as production from the top four producing countries, Thailand, Indonesia, Malaysia and India, dropped, output in the other four producing countries moved up.
Although from a relatively low base, supply from Cambodia grew 81 per cent mainly in view of an additional 19,000 hectares. This helped in off-setting the effects of declining yield that fell from 1,181 kg/hectare to 982 kg/hectare.
China strengthened its position in the global supply with production surging 17.9 per cent with 25,000 hectares added to the area under cultivation. The average yield increased to 1,182 kg/hectare (1,053 kg/hectare).
The average supply from Vietnam grew 9.7 per cent with the average yield rising to 1,717 kg/hectare (1,653 kg/hectare). The output from Sri Lanka, meanwhile, increased 4.7 per cent despite a fall in average yield, as the yielding area expanded. India just about managed match Sri Lanka in bringing more yielding area under rubber plantations at 3,000 hectares.
Spot rubber prices improve
Kottayam, Feb. 2
Spot rubber rates improved on Tuesday. Moderate gains in the domestic rubber futures and positive reports from most of the leading international markets catalysed the sentiments. Sheet rubber firmed up smartly to Rs 134 from Rs 132 a kg on fresh buying coupled with short covering. The market made all-round gains with improved volumes though major manufacturers were reported to be inactive.
Futures Improve
The February futures for RSS 4 bounced back to Rs 135.90 (133.65), March to Rs 138.70 (135.99), April to Rs 142.63 (139.55) and May to Rs 144.90 (141.62) a kg on National Multi Commodity Exchange (NMCE). RSS 3 was firm at Rs 141 (140.03) a kg on Singapore Commodity Exchange (SICOM). The grade (spot) slipped further to Rs 140.94 (141.27) a kg at Bangkok. The February futures for RSS 3 improved to ¥270 (¥264.5) (Rs 137.52), March to ¥270 (¥265.3), April to ¥273.7 (¥267.1) and May to ¥276.9 (¥270.3 a kg during the day session on Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 134 (132); RSS-5: 130 (129); ungraded: 128 (127); ISNR 20: 130.50 (129) and latex 60 per cent: 89.50 (89).
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