Natural rubber prices ‘not in line with prevailing factors’
A meeting between the International Tripartite Rubber Council and the International Rubber Consortium concluded that natural rubber prices are not reflective of the economic fundamentals affecting it.
While the consortium’s three member governments - Thailand, Indonesia and Malaysia - expressed concerns that the current downward rubber price trend and market factors are unrealistic, they are confident of the health of the natural rubber market and believe that prices should be adjusted to reflect market fundamentals.
The analysis is supported by prevailing fundamentals, as natural rubber producing areas in the Southern hemisphere, particularly in Indonesia, are expected to experience slower production as the wintering season peaks.
A reduction in production from Thailand and Malaysia is also anticipated due to low rubber prices and changes in weather patterns, compounded by unusual heavy rains in northern Thailand which affected rubber production there.
It is also expected that natural rubber consumption for 2017 will increase, supported by better world gross domestic product growth, where the positive GDP growth of major economies and improving commodity indices will further enhance the sentiment in natural rubber markets.
