KUALA LUMPUR (June 7, 2012)—Natural rubber-growing countries are becoming increasingly anxious over the Eurozone debt crisis and what it will do to NR demand, according to the Association of Natural Rubber Producing Countries.
ANRPC members are curtailing their growth projections after an optimistic first quarter of 2012, according to a letter from ANRPC Secretary-General Kamarul Baharain Basir in the May 2012 edition of the ANRPC publication, Natural Rubber Trends and Statistics.
“The current year is now anticipated to end with a 3.4-percent growth in demand, slower than the 4.5-percent rate anticipated a month ago,” Kamarul wrote.
The ANRPC has made a marginal increase in its projections on total NR production in 2012, to 10.5 million metric tons from the 10.3 million tons anticipated last month, according to Kamarul. NR supply rose 1 percent year-to-year in 2012's first quarter, and the association anticipates year-to-year growth of 3.2 percent in the second quarter, he said.
“These slow rates of output growth can offset the slackness in demand,” Kamarul said. “Although the demand and supply may more or less match each other during the year, this market is likely to continue its bearish mode on account of the continuing unfavorable trends in currency rates and crude oil.”
The euro crisis has already affected Asian economies through weak trade, volatile commodity markets and cautious investors, according to the ANRPC. U.S. crude oil futures dropped 17.5 percent in May alone, the association said. The U.S. dollar's recent gain in strength seems to be fading, and investors are turning increasingly toward the safe haven of the yen, it said.