Global NR production down in Q1, but prices rise marginally

Global production of natural rubber dropped 5.2% in the quarter ended March 31 to 2.99 million metric tons, but prices improved slightly, according to the latest data from the Association of Natural Rubber Producing Countries (ANRPC).

A long wintering season and low prices in some countries helped cause the decrease, ANRPC Secretary General Nguyen Ngoc Bich said in the March 2019 issue of the ANRPC newsletter, Natural Rubber Trends & Statistics.

"The new leaf fall disease in South Sumatra might also have contributed to the drop," Mr. Nguyen wrote in a letter at the beginning of the report.

World consumption of NR also fell, but much less, according to the ANRPC. Consumption fell 0.4% in the quarter to 3.38 million metric tons.NR prices increased somewhat in the first three months of 2019, and now hover around $1.45 per kilogram, Mr. Nguyen said.

On the other hand, concerns over U.S.-China trade negotiations have created global uncertainty that soon could translate into volatility in the NR market, Mr. Nguyen said. Price increases for NR did not match those in the crude oil market, he noted.NR production during the quarter fell 17.6% in Thailand, the world's largest NR producer, according to the report, to 1.02 million tons.

Production in Malaysia, however, rose 13.6% to 187,000 tons. Cambodia (up 36.8%) and Vietnam (up 15.9%) also reported double-digit increases.

Although NR demand in China rose only 0.5 percent in the third quarter, it still accounted for nearly 40 percent of world demand, at 1.33 million tons, the ANRPC said.