Production may increase 6.6 percent to 9.5 million metric tons, more than the 9.4 million tons forecast on Oct. 27, the Association of Natural Rubber Producing Countries said in an e- mailed statement today. Supply may drop 3.8 percent in the three months to Dec. 31 as rain disrupts tapping in Thailand, the biggest producer and exporter, the group said.
Rubber in Tokyo has climbed 30 percent this year as rain in Thailand, Indonesia and Malaysia, the top three growers, interrupted tapping and lowered production. Futures on the Tokyo Commodity Exchange reached a 30-year high of 383 yen on Nov. 11.
Total supply would be more than earlier predicted because Indonesia’s estimates for the third and fourth quarter have “undergone major revisions to the higher side” against a downward adjustment for Thailand and Malaysia, Jom Jacob, the group’s senior economist, said in the statement.
Thailand’s rubber supply this year may drop 1.4 percent to 3.12 million tons and rebound 4.1 percent to 3.25 million tons next year, the group said. Indonesia’s output may jump 16.9 percent to 2.85 million tons this year and climb further to 2.94 million tons in 2011, it said.
The price boom appears “to have prompted the dominant smallholders in Indonesia to exploit the maximum possible yield from their trees,” Jacob said. Indonesia’s production gained 33.1 percent in the three months to Sept. 30 and may increase 18.6 percent in the October to December period, he said.
China Drop
China’s consumption of natural rubber, including compound rubber, may drop 2 percent in the fourth quarter as the government takes steps to cool commodity prices, the group said. Imports of all forms of natural rubber may climb 7.1 percent to 3.26 million tons this year and increase by 6 percent to 3.45 million tons in 2011, the group said.
“Natural rubber markets do not appear to have received any notable support from the demand side,” Jacob said. “Concerns over China’s new policy measures clouded demand expectations.”
April-delivery rubber on the Tokyo Commodity Exchange gained as much as 2.6 percent to 368.7 yen per kilogram ($4,419 a ton) before settling at 362.6 yen today.
Chinese Premier Wen Jiabao’s government has raised interest rates, increased the reserve requirement for banks and pledged to use price controls if needed as part of efforts to rein in inflation that reached 4.4 percent last month. Analysts at nine banks surveyed by Bloomberg News last week predicted the PBOC will boost borrowing costs a second time by the end of the year.
China’s recent moves to crack down on speculation in commodities have worked, and prices of goods from cotton to copper have all declined, the National Development and Reform Commission said in a statement on its website today.
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