Global natural rubber output is seen at 10.475 million tonnes in 2012, nearly 2 percent above an April estimate of 10.297 million tonnes, on higher first-quarter Thai production, the Association of Natural Rubber Producing Countries said on Wednesday.
While total consumption by members of the ANRPC was likely to rise this year, the debt crisis in Europe and its possible impact on Asia cast a shadow over the demand prospect for natural rubber, the group said in a statement.
"The crisis in the euro-zone and worrisome economic trends world over seem to have damaged the demand prospects for natural rubber," said the group.
"(The) global economy has become much more fragile with a further deepening of debt crisis in the euro zone. Its impact on Asian economies has been in multiple ways such as weak trade, volatile markets and a cautious investment climate."
Consumption of member countries was estimated at 6.477 million tonnes in 2012, higher than 6.266 million tonnes last year but the growth rate was revised down to 3.4 percent from 4.5 percent anticipated in April.
"Given a sluggish economic outlook, the import-demand is likely to slow down during the third and the fourth quarters, especially from China, unless the country launches a new round of major investments," said the group, referring to the world's top consumer.
ANRPC's member countries, which include Thailand, Indonesia, Malaysia, Vietnam and India, currently account for about 57 percent of the global consumption of natural rubber and more than 90 percent of global output and exports.
Total production was estimated to rise around 1.5 percent to 10.475 million tonnes compared to last year's 10.325 million tonnes.
"The upward revision for this year is mainly contributed by Thailand. The country is reported to have produced 896,000 tons in the first quarter, far exceeding the preliminarily-estimated 739,000 tons," said the report, referring to the top producer.
"It is now anticipated that Thailand's production during this year would touch 3.625 million tonnes, up 1.6 percent from the previous year, as against a 1.1 percent annual fall to 3.531 million tonnes expected a month ago."
Tokyo rubber futures, which set the tone for physical prices, sank to their weakest in more than two years as Europe's debt woes heightened worries about the global economy and the outlook for demand.
The market has ignored a plan by Thailand to seek concerted action with fellow producers Indonesia and Malaysia to stabilise falling rubber prices. - Reuters
Source: www.thestar.com.my
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