Natural-rubber supply may expand 4.8 percent this year as planting area increases and high prices prompt farmers to continue tapping into the low-production season, boosting supply in February, a producers’ group said.
Production from members, which represent 92 percent of global supply, may total about 9.9 million metric tons this year, the Association of Natural Rubber Producing Countries said in a monthly bulletin today. That is lower than an “optimistic target” by member governments of 7.7 percent growth to 10.2 million tons, it said.
“Natural-rubber supply is unlikely to increase beyond 4.8 percent during 2011” as some farmers will uproot old trees for replanting, the group said. “The present tightness in the market could be continued if demand grows faster than supply.”
Rubber futures in Tokyo have gained 13 percent this year, extending last year’s 50 percent rally as rising car sales led by China and India boost demand, while rains disrupted tapping in the key growing nations of Southeast Asia.
“Supply this year may not increase that much, as persistent rains have lowered production across Southeast Asian countries,” Umaporn Thepnuan, senior marketing official at Future Agri Trade Co., said by telephone from Bangkok. Supply concerns and strong demand will continue to support prices, Umaporn said.
Tapping Prolonged
Supply in February from members of the group could be above average as higher prices motivate farmers to continue tapping until the end of February, the group said. Growers typically reduce tapping during the leaf-shedding season that begins in next month.
Output in January is expected rise 2.9 percent to 866,000 tons, slower than 13.5 percent growth in the same period last year, it said.
Production in Thailand, the world’s largest supplier, may rise 5.4 percent to 3.25 million tons this year, the group said, citing a government target. Indonesia is expected to produce 3.08 million tons, an 8.1 percent increase. Output from Malaysia may grow 8.2 percent to 1.05 million tons it said, citing government targets.
Consumption from the group’s member countries is expected to rise this year. China, the largest user of natural rubber, may consume 3.6 million tons, 9 percent more than last year. India’s demand may gain 5.2 percent to 991,000 tons, it said.
China’s imports may rise 6.3 percent to 1.85 million tons, the group said. The country’s imports surged 28 percent in the fourth quarter, while they jumped 83 percent in India, it said.
China’s vehicle sales may grow 10 percent to 15 percent this year after jumping 32 percent to 18.06 million vehicles in 2010, according to a forecast by the China Association of Automobile Manufacturers.
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