JAKARTA (Commodity Online) : Global rubber prices are likely to remain highly volatile this week after major producers Indonesia and Malaysia echoed mixed reports over supply and high prices.
According to world’s second largest producer, Indonesia’s leading trade body, Indonesia Rubber Association, country’s production is expected to dip by 4 percent this year owing to expected change in weather conditions.
Weather anomalies might hurt production by 3 to 4 percent of the target number, Indonesia Rubber Association president Asril Sutan Amir said as quoted by Jakarta post.
Indonesia’s production was previously forecast to top 2.97 million tons in 2011, up from 2.73 tons in 2010. Indonesia produced 2.8 million tons of rubber in 2010.
Asril said Indonesia's rubber productivity was 880 kilograms per hectare per year, much lower than Thailand and India, where productivity could top 1,500 kilograms.
The La Nina weather anomaly caused unusually heavy rains this year in Indonesia, including during the usual dry season, hitting output of many commodities.
Last week, Indonesian Rubber Association (Gapkindo) said it will increase its output by more than 20 percent to 3.6 million tonnes by 2015, to meet rising domestic and Chinese demand in fast-growing economies.
In Malaysia, dealers expect prices to ease this week as they see market players are expected to stay on the sidelines in anticipation of the fall in prices.
Analysts said rubber prices would also track the movements of regional rubber futures markets like the Tokyo Commodity Exchange and Singapore Commodity Exchange for direction.
(Source: http://www.commodityonline.com/news/Indonesia-weather-concerns-may-keep-up-rubber-38235-3-1.html)
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