Rubber Production From Key Growers to Climb on Thai Supplies

Rubber production from key growers may expand 1.5 percent this year, due mainly to higher-than- expected output from top growers Thailand and Indonesia, according to Association of Natural Rubber Producing Countries.

Output from members, representing 93 percent of global supply, may climb to 10.475 million metric tons, the group said in its monthly bulletin today. The group had said in April that production may drop 0.1 percent to 10.297 million tons, the first decline since a 3.8 percent contraction in 2009.

“Although the demand and supply may more or less match each other during this year, the market is likely to continue its bearish mode on account of the continuing unfavorable trends in currency rates and crude oil,” the group said.

Rubber futures in Tokyo plunged 16 percent in May, erasing gains this year, as concerns mounted that the European debt crisis may deepen and economic growth in China, the biggest consumer of rubber, may slow.

Imports by the group, which represents 57 percent of global rubber consumption, may increase 3.8 percent to 4 million tons this year, the association said. Purchases climbed 7.8 percent and 17 percent in the first and second quarter, it said.

Thailand’s production may total 3.63 million tons this year, more than the 3.53 million tons forecast in April, while output from Indonesia may rise to 3 million tons from 2.92 million tons, the group said.