El Nino to have little effect on China’s natural rubber prices

Currently, El Nino event in terms of level of activity, or from the impact point of view are larger. And in accordance with the impact of El Niño on the market over the years, and usually result in run-up natural rubber prices. Therefore, the operation or in the overall operation of the main ones, could be considered bargain layout than a single midline, but considering the limited short-term impact of the El Nino phenomenon, converting short-term market trend and smooth out, pay attention to only the profit.

El Niño typically leads to the South American rain, the drought in southern Asia, in particular, will generally result in Southeast Asia, India, Australia and drought, southern flood and drought in North China, and northern Brazil drier, wetter south. But now in Southeast Asia, especially Indonesia, Thailand and other countries still have a significant amount of rainfall, and the rainfall is larger, but the South American country was significant rainfall during El Nino should appear does not appear.

From our point of view, Hainan is a major producer of rubber, has recently appeared in Hainan indeed detected obvious arid market. As of May 31, 2015, Hainan Province, the average cumulative rainfall of 256.3 mm, more in the same period the average decrease of 35.3%. Continuous high temperature and drought cause the rubber seedlings can not grow, and some of the seedlings dry dead; part of a large area of rubber trees with yellow leaves, leaves phenomenon, part of the open cut tree appeared cut off, stop cutting. According to statistics, sea glue group’s nine branches cut off a total of 40 acres of rubber plantations were affected. China’s current total area of rubber plantation 1.148 million hectares, so overall, currently the affected area of about 2.3% in overall planted area. Temporarily affected area is also relatively limited.

In addition, statistics from the production point of view, according to statistics ANRPC this year from January to May of each country produced 4.078 million tons of plastic total output, down 1.16 percent compared with last year, of which 1.67 million tons production in Thailand, an increase of 19.7%, Indonesia’s production 1.331 million tons, essentially flat year on year, Chinese production of 200,000 tons, an increase of 3.1%, Vietnam yield 255,000 tons, down 1.9%. Overall, the current overall production has dropped slightly, but the impact of El Nino on the yield is still not significant.