KUALA LUMPUR, Malaysia (Nov. 29, 2011)—Falling prices and soft demand for natural rubber are causing the Association of Natural Rubber Producing Nations to slash its previous projections for NR production increases, the association said in the November edition of its statistical report, Natural Rubber Trends & Statistics.
NR production in ANRPC member countries—which account for 92 percent of world NR supply—will grow 5.6 percent to 10.023 million metric tons in 2011, according to the November report. This compares with the 6-percent growth rate the ANRPC predicted earlier this year and the 6.6-percent growth rate achieved in 2010.
In 2012, growth in NR production will fall still further, to 3.6 percent or 10.388 million tons, the ANRPC said.
The association adjusted its figures after a sharp drop in production increases throughout 2011, the report said. NR supplies in ANRPC countries grew 10.6 percent in the first quarter of 2011 and 10.7 percent in the second, but only 2.5 percent in the third, it said. Fourth-quarter production will barely change at all, it said, with a growth rate of only 0.6 percent.
“While NR prices continue falling, it is important to note that the fall has not been supply-driven, but caused by a sluggish demand in the backdrop of the current global economic worries, together with lack of support from speculative investments,” wrote Kamarul Baharain Basir, ANRPC secretary general, in a letter dated Nov. 28 and published as a foreword to the November report.
Because of low profitability, NR farmers simply aren't tapping their trees as frequently as before, or caring for them sufficiently to optimize yield, the ANRPC said. Smallholders are idling or even uprooting older, lower-yielding trees, and severe floods have forced NR farmers in Thailand to tap less often, it said.
Rubber-growing areas in Malaysia and Indonesia are expected to shrink marginally in 2012, but expand strongly in Thailand and more modestly in other ANRPC countries, the report said. Total rubber-growing area in ANRPC nations will grow 162,000 hectares (405,000 acres), with an average increase in yield of 19 kilograms per hectare, it said.
Meanwhile, the ANRPC expects total NR exports from member nations to decrease 3 percent on an annualized basis during 2011's fourth quarter, because of weak demand and disruptions caused by the floods in Thailand.