Malaysia's Natural Rubber Production May Climb by 6 Percent

Malaysia's natural rubber production may climb by 6 percent in 2011 from last year, rather than by 5.6 percent estimated at the start of the month, according to the Association of Natural Rubber Producing Countries. Output from countries representing 92 percent of global supply might increase to 10.06 million metric tons from 9.5 million metric tons.

Rubber futures have lost 29 percent this year in Tokyo on concern that a slowing U.S. economy and a deepening European debt crisis will reduce demand for the commodity used in tires and gloves. Prices increased 4.6 percent to 295.10 yen per kg recently on the Tokyo Commodity Exchange as European leaders inched toward a strategy to contain the debt crisis.

The impact of the rains and floods in Thailand, the biggest grower, was of “less significance” as supply for natural rubber was mainly concentrated in the south. The country might produce 3.38 million metric tons this year compared with 3.25 million metric tons in 2010. Production in Indonesia was predicted at 2.96 million metric tons versus 2.74 million metric tons, while in Malaysia, output was estimated at 1.02 million metric tons compared with 939,000 metric tons, the group said. Exports might rise 2.6 percent this year to 7.67 million metric tons, less than the 3.1 percent growth estimated until a month ago and versus 10.4 percent in 2010.
While the lower rate mostly reflected weak demand because of the global economic slowdown, floods in Thailand had reportedly disrupted some movements to ports.

Demand from China, India and Malaysia, representing 45 percent of the global total, was likely to grow only 0.7 percent this year compared with a 4.7 percent gain in 2010.(Excerpt from Rubber World News)