This entry was posted on Wednesday, August 19th, 2009 at 5:03 pm and is filed under Rubber News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
SINGAPORE, Aug 19 (Reuters) – Natural rubber output in Thailand, Indonesia and Malaysia dropped 13 percent to 3.02 million tonnes in the first half of this year due to declines in tapped areas, lending support to prices, an industry group said on Wednesday.
Thailand, Indonesia and Malaysia account for 70 percent of global rubber output, according to the Association of Natural Rubber Producing Countries (ANRPC), which also groups India, Vietnam, China and Sri Lanka. Aging trees, a replanting programme launched last year by the three main producers to prop up prices as well as erratic weather contributed to a fall in output in the first six months of 2009, the group said in its August report.
“The present higher rate of replanting shadows the planting boom of the 1980s. Replanted trees take six to seven years to start yielding. That means, replanting results in shrinkage in yielding area,” it said.
Excess rains had also restricted tapping, while plantations in Malaysia in particular were hit by relatively higher morning temperatures which curbed the flow of latex.
“A drop in production should support the prices,” it said.
Benchmark Thai RSS3 has bounced nearly 90 percent to above $2 a kg since hitting a seven-year low of $1.10 in December after Thailand, Indonesia and Malaysia agreed to cut exports to offset falling demand from tyre makers during the global economic downturn.
For details on physical prices in Asia on Wednesday, click on [RUB/AS]
The three main producers agreed in December to take 915,000 tonnes of rubber out of the market in 2009, or a sixth of their 2007 combined exports of 5.5 million tonnes.
The ANRPC said Thailand’s production fell 12.4 percent to 1.304 million tonnes in the first half this year compared with the same period in 2008.
Indonesia’s production contracted 6 percent to 1.341 million on the first half, while Malaysia’s output dropped 32.6 percent to 378,300 tonnes.
Quoting government data, the group said tapped areas in Malaysia were expected to fall to 2.7 million hectares in 2009 from 3.4 million hectares last year. Malaysia’s tapped areas were estimated to drop to 740,00 hectares this year from 1.2 million tonnes last year.
There was no data yet from top producer Thailand, said the group.
“The weather is improving but some areas are still being disturbed by the rains. That’s why we see lower production,” said a dealer Thailand’s southern city of Hat Yai.
Source: Reuters