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 tons in 2012, higher than 6.266 million tons last year but the growth rate was revised down to 3.4 per cent from 4.5 per cent 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 per cent of the global consumption of natural rubber and more than 90 per cent of global output and exports.
Total production was estimated to rise around 1.5 per cent to 10.475 million tons compared to last year’s 10.325 million tons.
“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 tons, up 1.6 per cent from the previous year, as against a 1.1 per cent annual fall to 3.531 million tons 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.