The Association of Natural Rubber Producing Countries (ANRPC) reports that global natural rubber supplies are tight and the outlook is bullish on favourable fundamentals.
The ANRPC secretary-general Djoko Said Damardjati says that exporting countries are oriented towards ensuring the best price, which will improve farm income and export earnings. He adds that no producer nation holds any buffer stock.
Rubber prices doubled in 2009, the best performance since at least 1976, driven by, optimism that demand is increasing as the world recovers from recession and producers curbs supplies. The association's members include Cambodia, China, India, Indonesia, Malaysia, Papua New Guinea, Singapore, Sri Lanka, Thailand and Vietnam. Total output from these countries represents about 94% of global supply.
Bangkok-based Future Agri Trade marketing official Umaporn Thepnuan is optimistic that prices could move up further. Using price history as a guide, she says that futures in Tokyo may climb to 350 yen/kg or $3,891/t, should they close above 303,8 yen, the highest end-session level since September 2008.
Thailand, Indonesia and Malaysia, the three biggest growers, view the current price as appropriate and agreed to take steps to counter any negative trends, according to a joint statement after a meeting, last week, in Kuala Lumpur.
The International Rubber Consortium, which represents growers and exporters, says that nations put on hold plans to curb exports as the economic recovery boosts prices and demand. Supply was cut after prices fell to 99,8 yen/kg, or $1,103 a metric ton, in December 2008, the lowest level since August 2002. The price has almost tripled since then to 284,6 yen/kg.
"The industry is passing through a situation of tight supply caused by a progressive decline in production and a marked rebound in demand," says Said Damardjati.
The ANRPC has raised its prediction for output this year in Indonesia, the second-largest producer, to 2,77-million tons from 2,68-million tons. It also reports that India's production may total 853 000 t, up from the previous estimate of 84 000 t. Vietnam may produce 770 000 t, up from 680 000 t, and exports will probably be 750 000 t.
Total supply of natural rubber in the ANRPC member countries declined by 5,1% in 2009 to 8,7-million tons. The plantation area expanded to 7,13-million hectares at the end of 2009 from 7,02-million hectares a year earlier.
The ANRPC is an inter-governmental organisation established in 1970. Its membership is open to the governments of countries producing natural rubber. The ANRPC aims to continuously improve productivity of rubber holdings, reduce cost, increase value addition in downstream rubber sector, explore sources of ancillary income, capitalise on eco-friendly credentials of natural rubber and thereby improve the well-being of rubber farmers.