Rubber output in top producer Thailand is expected to rise as much as 5 percent in 2014, fuelled by maturing plantations, but an increase in demand may prop up prices, a senior industry official told Reuters on Monday. "I'd say production will increase by 3 to 5 percent maximum," said Bundit Kerdvongbundit, secretary-general of the Thai Rubber Association.
"It's supposed to increase by 10 percent for the past two years because more trees are grown. But due to bad weather, which affects supply, the increase is lower than expected," Bundit said ahead of a rubber summit in Singapore. Thailand produced 4.17 million tonnes of rubber in 2013, up from 3.78 million in 2012, says the Association of Natural Rubber Producing Countries (ANRPC), whose members account for 90 percent of global output.
When asked if the rising output could affect prices, Bundit said: "I don't think so, because consumption is always increasing." He gave no further details. Thailand's domestic consumption was estimated at 521,000 tonnes in 2013, when exports stood at 3.66 million tonnes, according the ANRPC. There were no estimates for this year's domestic demand and exports.
Rubber on the Tokyo Commodity Exchange, the global benchmark, has plunged about 25 percent this year on fears of slower economic growth in top consumer China. Despite a recent rebound, the TSR20 contract on Singapore's SICOM exchange, which covers Thai, Indonesian and Malaysian grades, is still not far from its weakest in nearly five years.
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