KUALA LUMPUR, Malaysia — Global demand for natural rubber (NR) is set to grow 2.8 percent in 2018, more than double the 1.2-percent rate recorded during 2017, according to the Association of Natural Rubber Producing Countries (ANRPC).
In its latest monthly report, the ANRPC predicted that demand would grow to 13.3 million metric tons from just shy of 13 million tons in 2017.
Contributing to this growth, the ANRPC said, are an improving global economy, and the expected impact of recently approved changes to U.S. taxation policy.
Furthermore, the outlook for commodity market prices is expected to strengthen during 2018, due to oil production cuts by the Organization of Oil Exporting Countries (OPEC) and political tensions in the Middle East.
The global supply of NR — 90 percent of which is fulfilled through ANRPC members — is set to rise 4.5 percent this year to 13.8 million tons in 2018, the association said.
The growth rate in production is slightly less than in 2017, which stood at 4.7 percent, due primarily to anticipated lower production by Thailand at 4.38 million tons.
Reviewing market performance in January, the ANRPC said an early wintering season faced by rubber farmers in China had slowed production.
The same seasonal factor soon will be seen in other major producing countries, the group said.
"Slowdown in NR supply may be expected, and this may lead to a much-balanced supply-demand NR market in the coming months," the association concluded.