Rain could slow rubber production

Rain could slow rubber production
November 28, 2011





Bangkok: Growth in natural rubber production in key growing countries may slow next year as heavy rains disrupt tapping and declining prices prompt growers to cut supply, according to the Association of Natural Rubber Producing Countries.

“Weather impacts and prices influence the trends of natural rubber supply,” Kamarul Bahrain Bashir, secretary-general of the Kuala Lumpur-based association said in an interview yesterday. Prices move down following economic trends, driving producers to cut supply in response to declining demand, he said.

Demand set to rise

Production from its member countries, representing 92 per cent of global supply, may expand 3.7 per cent to 10.4 million tons next year. That compared with a revised growth of 5.6 per cent to 10 million tons this year, Kamarul said on a sideline of the Global Rubber Conference in Phnom Penh.

Demand from member countries, which accounts for 57 per cent of global consumption, is estimated to rise 2.9 per cent next year to 6.3 million tons, he added.

Declining supply will help support rubber futures which have tumbled 37 per cent this year.






Rubber output growth may slow next year
November 28, 2011





GROWTH in natural rubber production in key growing countries may slow next year as heavy rains disrupt tapping and declining prices prompt growers to cut supply, according to the Association of Natural Rubber Producing Countries.

“Weather impacts and prices influence the trends of natural rubber supply,” Kamarul Baharain Basir, secretary-general of the Kuala Lumpur-based association said in an interview yesterday. Prices move down following economic trends, driving producers to cut supply in response to declining demand, he added.

Production from its member countries, representing 92 per cent of global supply, may expand 3.7 per cent to 10.4 million tonnes next year. That compared with a revised growth of 5.6 per cent to 10 million tonnes this year, Kamarul said on a sideline of the Global Rubber Conference in Phnom Penh.

Demand from member countries, which accounts for 57 per cent of global consumption, is estimated to rise 2.9 per cent next year to 6.3 million tonnes, he added.

Declining supply will help support rubber futures which have tumbled 37 per cent this year as Europe’s deepening sovereign-debt crisis and the worst floods in almost 70 years in Thailand, which disrupted car production in Asia and North America, raised demand concerns.

“The natural rubber market is likely to continue lacking momentum due to the possibility of sluggish demand in the short term,” said Kamarul.

Lower prices will encourage growers, especially in Thailand, Indonesia and Malaysia, to increase cutting down aged trees, Kamarul said. The replanting rate is estimated to be around 3 per cent to 4 per cent during 2013 to 2018, which will result in annual production growth of 2 per cent to 6 per cent during the period, he added. Bloomberg






Rubber production may fall in 2012 on adverse weather
November 28, 2011





BANGKOK (Commodity Online): The natural Rubber production in the key growing countries for next year is likely to go down on adverse weather conditions and lower global prices, according to Association of Natural Rubber Producing Countries.

The decline in production would badly affect the automobile industries, glove industry etc .

The worst floods in Thailand affecting the tapping of rubber and the lower prices due to global economic slowdown has been the reason for the lower production for 2012.

Lowering the output is expected to help the prices to pick pace, which had dropped 37% in the current year.

Meanwhile, In India, the demand from the car manufacturers, has widened the deficit over the supply of natural rubber.

According to a Bloomberg report, Sheela Thomas, Rubber Board of India’s chairman, during the Global Rubber Conference in Phnom Penh, the current deficit stands around 75,000 metric tons and the country is expected to produce around 865,000 tons by the end of march 2012. The annual production growth for the next five years is estimated at 2.5 to 3%, while consumption is projected at 2.5 to 3.5%

On Tokyo Commodity Exchange, the rubber for December contract traded at 248 Yen as of 28th November at 14:25 JST.







Thai southern monsoon supports rubber prices
November 28, 2011





By Apornrath Phoonphongphiphat

BANGKOK, Nov 28 (Reuters) – Heavy monsoon rains and flash floods in the southern region of Thailand have disrupted tapping in the country’s major rubber areas, which could push up prices over the coming weeks, a senior official said on Monday.

Physical rubber prices more than halved to about $3.00 per kg in early November, from their February highs of $6.40 per kg, weighed by fears of diminishing demand caused by the debt crisis in Europe.

The price of benchmark Thai smoked rubber sheet (RSS3) was $3.35 per kilogram on Monday, up from $3.30 per kg on Friday. Thailand is the world’s largest rubber producer.

Heavy rains caused flash flooding and landslides in several provinces along the Gulf of Thailand, uprooting trees and destroying some plantations completely. The floods have also played havoc with rubber tapping.

Farmers will have to replant and wait at least 7 years for the new crop to mature and start producing latex, said Pongsak Kerdwongbundit, head of the Thai Rubber Association.

“No matter how much rubber factories offer to buy, there is no rubber to be sold as farmers can’t go tapping,” Pongsak told Reuters.

“If things go on like this for a couple of weeks, rubber prices will definitely shoot up,” Pongsak said, declining to forecast how high prices could reach.

The Meteorological Department has warned that the heavy rains would continue along the southeastern regions for the next few weeks.

Thailand, Indonesia and Malaysia, which account for 70 percent of global output, said on Nov. 19 they did not see any immediate need for price intervention because moonsoon rains were likely to curb supply, pushing up prices.

Thailand has been ravaged by floods in the north and central regions since July. It is due to submit its own measures to support rubber prices for cabinet approval on Tuesday.

According to the proposal, the Thai government will offer a 10 billion baht ($318 million) soft loan to agriculture cooperatives to buy rubber from farmers at 95 baht per kg.

The prices of unsmoked rubber sheet (USS3), which farmers sell to rubber factories, was 93 baht per kg. ($1 = 31.3700 Thai baht) (Editing by Roshni Menon)





Tokyo futures at 1-week high, but gains capped
November 28, 2011





BANGKOK, Nov 28 (Reuters) – Tokyo rubber futures jumped more than 3 percent to a one-week high on Monday on the back of rising oil prices and limited supply in producing countries, but gains were still capped by profit-taking, dealers said.

The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for May delivery rose 6.0 yen to settle at 269.0 yen ($3.46) per kg.

It rose as high as 3.3 percent to an intra-day high of 271.4 yen per kg, the highest since Nov 21.

The most-active Shanghai rubber contract for May delivery rose 630 yuan to finish at 25,085 yuan ($3,900) per tonne.

“Sentiment improved as the rubber market was supported by limited supply and stronger oil prices, but prices settled below 270 yen eventually, due to profit-taking,” said a Bangkok-based dealer.

Brent crude rose more than $1 toward $108 a barrel on Monday, supported by renewed euro zone efforts to end the debt crisis and optimism that Italy could get financial help from the International Monetary Fund (IMF).

Physical rubber prices have rebounded and were expected to rise higher in coming weeks as supply in Thailand, the world’s biggest rubber producer, was cut significantly by heavy monsoon rains that caused flash floods, killing 5 people and disrupting tapping. ($1=77.6800 Japanese yen) ($1=6.3750 Chinese yuan)