China and India to boost NR growth, says ANRPC

natural-rubberDriven by improved outlook in the case of China and India, the world consumption of natural rubber (NR) is anticipated to grow faster than what was expected until a month ago. The outlook on consumption during 2018 has been substantially scaled up in the case of China and India, the first two largest consuming countries jointly contributing around 48% of the world consumption. Based on the revised outlook, the consumption in China is expected to rise by 6.2% to 5.7 million tonnes as against a 0.6% fall anticipated until a month ago.  In India, the revised outlook suggests consumption rising by 10.9% to 1.2 million tonnes during 2018, much faster than the 6.8% growth expected a month ago. The revised scenario implies that a quantity of 790,000 tonnes will be additionally consumed in the two countries as compared to the scenario expected a month ago.

The better-than-expected performance posted during the first four months of 2018 manifests the improved outlook anticipated for the full year. During the four months from January to April 2018, the world consumption increased by 5.5%, year-over-year, to 4.6 million tonnes. But, the world production increased only by 2.6% to 4.0 million tonnes during the same period. During the year 2018, the world production is anticipated at 14.2 million tonnes, at 6.4% growth, and the world consumption is anticipated at 14.3 million tonnes, at 6.4% growth.

The above favourable developments in the demand-supply fundamentals have helped the market to register a marginal recovery despite the unfavourable conditions caused by the US-China trade tensions, high level of inventory held at the designated warehouses of the Shanghai Exchange and volatile exchange rates. The market sentiments have been partly benefited by the seasonal low supply coinciding with the leaf-shedding of rubber trees. Furthermore, India has down-scaled the production outlook for 2018 by 99,000 tonnes to 720,000 tonnes following a 11.4% fall posted during the first four months of the year. Harvesting will be disrupted in India and Sri Lanka during the period from June to August in view of the southwest monsoon which is expected to set in by the end of May.