LONDON (Oct. 23)—Natural rubber stocks will fall sharply through year-end 2003, providing a marked boost in NR prices next year and the year after, the Economist Intelligence Unit is predicting. Despite an expected 7.4-percent fall in the price this year, EIU's indicator price for natural rubber is set for a massive rebound over the next two years, the London-based group said in its latest World Commodity Forecast. Natural rubber prices will then grow by 5.9 percent and 62.6 percent in 2002 and 2003, respectively. In spite of lower demand, the EIU said "a serious shortage of natural rubber in the next two to three years now looks a strong possibility, sending prices up sharply in 2003." Global NR stocks coverage is likely to fall from 12 weeks at the end of 2001 to just four weeks' needs by the end of 2003, it predicted. However, the group has downgraded its estimates for the NR market over the next two years after the Sept. 11 terrorist attacks in the U.S. The EIU predicted NR demand "to shrink by around 6 percent this year and by not much less in 2002 and 2003." Charting the scale of this year's decline, EIU said first-quarter consumption of natural rubber was nearly 22 percent lower than in 2000.
NR stocks to fall through 2003, EIU predicts
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