War, crude oil prices may hinder predicted growth for 2022 NR market

KUALA LUMPUR—The global natural rubber market should see marginal growth in both production and consumption this year, the Association of Natural Rubber Producing Countries has forecast.

World production is expected to grow by 1.9 percent year-on-year to 14.107 million metric tons during 2022, said ANRPC's January-February NR trends report

Global consumption of the commodity is set for a 1.2-percent increase to 14.232 million tons, according to the report issued March 17.

Despite the positive forecast, ANRPC said the market also faces several challenges which may hinder growth.

On the supply side, the market is "heavily affected" by adverse climate as well as labor shortages in some producing countries, which are experiencing a rising spread of COVID-19.

Furthermore, the region is entering the "off-tapping season" which may aggravate the supply tightness of raw material in the coming months.

On the consumption side, demand is driven by the healthcare sector and positive automotive growth in some major economies.

However, other global events such as geopolitical crises, rising crude prices as well as supply-chain disruptions caused by delayed shipping schedules could impact growth.

In terms of pricing, ANRPC said rubber markets witnessed a recovery during the first two months of the year.

This is linked to encouraging global manufacturing activities, positive automotive growth in major economies as well as strong demand from the gloves and other healthcare segments.

Post-pandemic economy recovery, it added, may also be supported by some countries' decisions to reopen their borders to boost their economies.

Furthermore, a price rally in crude oil prices, driven mainly by the war in Ukraine, could also influence the NR market, ANRPC noted.