Global rubber production is estimated to have fallen by the highest rate in 34 years due to weather factors and an economic recession.
Production of both synthetic and natural rubber is estimated to have fallen 11% during the January-September period, and only a small recovery is expected next year, the International Rubber Study Group said Wednesday.
"The last time a fall of this magnitude was recorded was in August 1975," the IRSG said in its latest report.
Analysts said dry weather in Indonesia, floods in Thailand, replanting activity in major growing regions, lower yields and unattractive prices during the first half of 2009 contributed to the decline in output.
They said the supply situation is expected to remain tight early next year due to lower output in 2009 along with a recovery in demand.
Natural rubber production in 2010 is forecast at 10.40 million tons, only marginally higher than a projected 9.4 million tons this year. Production is expected to gradually rise to 14 million tons by 2019.
However, combined demand for synthetic and natural rubber has started to improve and is expected to rise 12% next year.
"In the short term, following the declines in 2009 and assuming a relatively strong recovery in the world economy, global rubber consumption is forecast to reach 23.9 million tons in 2010," said the report.
It said in the long term, total rubber consumption may reach 30.4 million tons by 2019.
The IRSG said the rate of decline in consumption, estimated at 12.8% on year during the January-July period, had already slowed to 12% during January-September.
(Source: irco.biz)
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