NR supply shortage lingers, but prices rise in August

KUALA LUMPUR—Global natural rubber supply shortfalls continued in August, according to the Association of Natural Rubber Producing Countries.

World NR production in the first eight months of 2017 amounted to 8.038 million metric tons, compared with world consumption of 8.544 million tons—a shortfall of more than 500,000 tons, according to the August issue of Natural Rubber Trends & Statistics, the ANRPC's official publication.

The shortfall and other factors—including development in the oil industry, inventories in regional futures markets, stronger currencies and geopolitical tensions—caused NR prices to increase in August, the ANRPC said.

"During August 2017, the physical rubber prices have recovered from the fall in late July 2017 and demonstrated an upward trend in price across key markets in Kuala Lumpur and Bangkok," the August report said.

Standard Malaysian Rubber 20, or tire-grade rubber from Malaysia, rebounded in August to about $1.60 per kilogram, the ANRPC said.

Prices for Standard Thai Rubber 20 and Rubber Smoked Sheets 3 from Bangkok also were less volatile in August than in previous months, it said.

All ANRPC member countries except Thailand reported NR production increases. Thailand, the world's largest NR producers, fell 1.1 percent to 2.64 million tons in January-August 2017 from 2.67 million tons during the same period in 2016, the report said.

Total NR production from ANRPC countries grew 5.1 percent in the eight-month period, to 7.2 million tons from 6.8 million, it said.

NR demand in ANRPC countries slipped 0.3 percent in January-August, to 5.42 million tons from 5.41 million. The association recorded softer demand in China, Sri Lanka and the Philippines during the period.

In other news, the ANRPC has scheduled its 10th Annual Rubber Conference for Oct. 23 at the White Palace Convention Centre in Ho Chi Minh City, Vietnam.

"Re-engineering Value Chain for Revitalizing Production Sector" is the theme of this conference, which will be attended by about 3000 rubber industry players, analysts and policymakers from 15 countries, the ANRPC said.

ANRPC Secretary General Nguyen Ngoc Bich will address the conference on the topic, "Optimizing supply-chain infrastructure of global NR industry" and moderate a panel on, "Value addition in major natural rubber exporting countries."

Other presentations include:

• "What farmers can gain from an efficient supply chain," by Diego Esperante, executive director of the Sao Paulo Association of Producers and Processors;
• "Guidelines for sustainable natural rubber industry," by Sun Lihui, director of the Development Department for the China Chamber of Commerce, Metals, Minerals and Chemicals;
• "Increasing influence of Shanghai futures on farmers' income" by Patrick Yeo Ek Meng, vice president, Straits Financial, Singapore; and
• "Markets run by farmers: Experience across ANRPC member countries," a panel moderated by A. Ajith Kumar, executive director & chairman of the Rubber Board of India.