ANRPC: Natural rubber production impacted by flooding, tree disease

World consumption of natural rubber grew 5.2 percent in the first seven months of 2018, compared with growth of 3.7 percent in world NR supply, according to the July 2018 issue of Natural Rubber Trends & Statistics from the Association of Natural Rubber Producing Countries.

World NR production totaled 8.16 million metric tons in January-July 2018, and production stood at 7.37 million tons, for a total production shortfall of 786,000 tons, ANRPC Secretary General Nguyen Ngoc Bich wrote in his August 23 letter prefacing the July report.

"Unfavorable weather conditions and prevailing low rubber prices have resulted in a production fall in Malaysia, Vietnam, India and Sri Lanka during the first seven months of 2018," Nguyen wrote.Vietnam saw the biggest drop in production during the period, at 17.6 percent, according to the report. Malaysian production fell by 16.5 percent, Sri Lankan production by 10.3 percent and Indian production by 8.5 percent, it said.

India is seeing the worst flooding in its NR-growing region since 1924, the ANRPC said. Also, both India and Vietnam are suffering an outbreak of leaf and bark diseases, it said.

However, other NR growing countries saw an increase in production over the seven months—Thailand by 10 percent, Cambodia by 15.7 percent, China by 9.2 percent and Indonesia by 6.3 percent, the report said. Production in the Philippines grew by 10.5 percent, largely through expansion of the area planted with mature Hevea trees, it said.The ANRPC currently projects a 5.2 percent increase in world NR production in 2018, to 14.04 million tons, according to the report. But continued flooding may cause some countries to revise their yearly estimates downward, it said.

As for NR consumption, China—representing 40 percent of world demand—remained the world's biggest NR consumer in January-July 2018, the report said.

However, the 2.8 percent growth in Chinese demand, to 3.23 million tons, was below expectations, it said.

A slowdown in Chinese manufacturing, caused by concerns over higher U.S. tariffs on Chinese tires and rubber products, was the main cause of softer NR demand, according to the ANRPC. However, an increase of 12.2 percent in NR demand in India mitigated the loss in Chinese demand, it said.