The prices of natural rubber continued to
fall, pushing down the growth in the commodity's global supply this year to 5.6%
(to 10.023 million tonnes) from an earlier estimated growth of 6%. The current
indications are that the price fall started impacting on the supply. The total
supply from member countries of the ANRPC, which grew annually at 10.6% in Q1
and 10.7% in Q2, had slowed down to 2.5% in the third quarter. It is expected
to slow down further to 0.6% in the fourth quarter.
According to a rubber exporter from South
Sumatra - Indonesia, the rupiah’s recent weakness gives rubber producers room
to breathe despite lower rubber production and a possible price drop. The
country is entering a heavy rainy season, which will reduce natural rubber
production.
Rubber prices are down to just above $3 per kg,
compared to $6.4 per kg in February. The price drop stems from worries about
the economic slowdown in European countries, which account for 11% of total
global demand for natural rubber. Demand from the 11 members of the Association
of Natural Rubber Producing Countries, which account for 57% of global
consumption, is estimated to rise 2.9% next year to 6.3 million tons.
The dollar could be volatile for the next
month, or until political leaders find a solution to the euro zone crisis.
Asian currencies will rise again in six to nine months’ time as investment
returns to the region.
Read
lot more in Rubber4U – 1st December 2011 issue
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