Global supply of natural rubber expected to be hit by La Nina, poor weather

November 8, 2017

natural-rubberThe International Rubber Consortium (IRCo) has predicted that the La Nina phenomenon and overall poor weather condition to reduce the global supply of natural rubber (NR).

The  La Nina phenomenon is expected to bring heavy rains from November 2017 to January 2018.

“Given the current supply and demand situation of NR, the prices are not reflective of market fundamentals,” said IRCo Chairman Mesah Tarigan along with all BoD members from IRCo.

IRCo said there are strong sentiments favouring the demand for NR such as an improved global GDP growth rate in 2017 which is projected at 3.6% compared to 3.2% in 2016

It also noted that the improvement of automobile sales in major markets i.e China, EU and Japan which grew by 4.8%, 3.7% and 7.1% respectively during the first three quarters of 2017 compared to corresponding period in 2016, which had a direct impact on the demand for NR for the production of tyres

In addition to that, we see better market situation for other commodities such as the strengthened crude oil prices and other commodities as indicated in NYMEX and GCSI Commodity Index.

Meanwhile, there is increasing usage of NR by Thailand, Indonesia and Malaysia for the construction of their roads and highways.

“The three Countries will collectively monitor and consider measures to strengthen NR prices, taking into account that the majority of rubber planted areas are managed by smallholders and any reduction in prices has a direct impact on their income and welfare,” said Mesah.

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International Rubber Prices
(as of 14, November 2017)

Monthly The prices shown above do not include VAT @4% on purchase and expenses towards packing, transportation, warehousing  and other incidentals


Source: India Rubber Board

Automotive

PRA ELECTRONIC ISSUE 2017
November/December 2017 Issue

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