According to a statement released by the Association of Natural Rubber Producing Countries (ANRPC), world consumption of natural rubber is anticipated to grow faster than what had been expected up to a month ago, and this growth will be driven by an improved outlook in China and India.
The outlook on consumption for 2018 has been substantially scaled up in China and India, the first two largest consuming countries jointly contributing to around 48% of world NR consumption.
Based on the revised outlook, consumption in China is expected to rise by 6.2% to 5.7 million tonnes against a 0.6% fall anticipated until a month ago.
In India, the revised outlook suggests consumption is rising by 10.9% to 1.2 million tonnes in 2018, much faster than the 6.8% growth expected a month ago.
The revised scenario implies that a quantity of 790,000 tonnes will be additionally consumed in the two countries compared to what was expected a month ago.
The better-than-expected performance posted during the first four months of 2018 manifests the improved outlook anticipated for the full year. During the four months from January to April 2018, world consumption increased by 5.5%, year-on-year, to 4.6 million tonnes; but world production increased by only 2.6% to 4.0 million tonnes during the same period. In 2018, world production is anticipated to be 14.2 million tonnes, at 6.4% growth, and world consumption is anticipated to be 14.3 million tonnes at 6.4% growth.
The aforementioned favorable developments in the demand-supply fundamentals have helped the market to register a marginal recovery despite the unfavorable conditions caused by the USA-China trade tensions, the high level of inventory held at the designated warehouses of the Shanghai Exchange, and volatile exchange rates. Market sentiments have partly benefitted from the seasonal low supply coinciding with the leaf-shedding of rubber trees.
Furthermore, India has downscaled the production outlook for 2018 by 99,000 tonnes to 720,000 tonnes following a 11.4% fall posted during the first four months of the year. Harvesting will be disrupted in India and Sri Lanka during the period from June to August in view of the southwest monsoon season which is expected to set in by the end of May.
