BANGKOK—The new head of the International Rubber Consortium is warning that the industry faces a potential shortage of natural rubber as early as this year, based on fall NR output and smaller-than-estimated stocks.
Salmiah Ahmad, named IRCo's CEO Sept. 1, said, “The market's perception of high-level rubber stock, particularly at producing countries, needs to be corrected.”
IRCo's analysis of the NR market contrasts with those of other analysts, in particular that of the International Rubber Study Group (IRSG), which warned in April of a potential NR oversupply in the years to come. The group predicted there would be surpluses of 1 million metric tons of NR and 3 million tons of synthetic rubber (SR) by 2020.
In a statement posted on the IRCo's website, Ahmad said, “Our analysis is that we don't have as much stock as other organizations say we do… there are discrepancies.
“The decrease of natural rubber production … particularly the production in Thailand and India, would lead to a possible global natural rubber shortage in 2015.”
The IRCo represents countries that produce nearly 70 percent of NR globally.
Low rubber prices and slow demand as well as bad weather conditions have led to a drop in NR production in 2015, the group said.
Prachaya Jumpasut, editor of Rubber Economist, also predicted both NR and SR global balances may show a deficit this year, “but a surplus is expected for the next two years to take the stocks to another record high.”
On pricing however, Ahmad expressed optimism, saying prices were likely to “gradually improve” over the remainder of the year due to steadier global economy and efforts by the Association of Natural Rubber Producing Countries (ANRPC) to keep year-over-year production unchanged or even reducing it.
