| KOCHI, India
KOCHI, India Feb 21 Global prices of natural
rubber are likely to rebound in the next few months from
multi-year lows as political unrest dents output in top producer
Thailand and demand from China stays robust, industry and
government officials said.
"The stock level in producing countries is very low,"
Kamarul Baharain bin Basir, secretary general of the Association
of Natural Rubber Producing Countries (ANRPC), told Reuters.
"Now wintering has started. This could lead to higher
Latex output drops during the dry wintering season, when
trees shed leaves. Wintering in Thailand and neighbouring
Malaysia runs from February to April. In Indonesia, it runs from
February to May before resuming in July through September.
"Thailand is the top producer. Even a 5-percent drop in its
production would change the supply situation," Basir added.
Protesters have been campaigning for months to oust Thai
Prime Minister Yingluck Shinawatra and turned their anger on
businesses linked to her wealthy family on Thursday.
Thai rice farmers who have waited months for government
payments for their produce on Friday called off a protest
tractor drive only after winning a government commitment to pay.
China, the world's biggest consumer of rubber, is set to
consume a record a 8.3 million tonnes in 2014, which would lift
its natural rubber imports by 11 percent.
"Tyre makers need more rubber. They need to cater to rising
demand from the auto industry," said Sunny Song, director at the
China Rubber Industry Association.
The China Association of Automobile Manufacturers expects
the auto market to grow 8 to 10 percent this year, echoing the
views of industry experts and analysts that 2014 will be another
strong year for the world's top auto market. Vehicle sales rose
13.9 percent last year from a year earlier.
Prices of tyre grade rubber fell to multi-year lows on
persistent worries about a slowing economy in China, its high
levels of inventory and weakness in benchmark rubber futures on
the Tokyo Commodity Exchange (TOCOM).
But industry officials said the rise in China's inventories
has a limited role in determining prices.
"Everybody is excited about China's stocks, but that is not
an unusual thing, considering its rising consumption. Inventory
has to rise in sync with consumption," said Stephen Evans,
secretary-general of the International Rubber Study Group
Warehouse inventories monitored by the Shanghai Futures
Exchange have risen to their highest since 2004, while
closely-watched stocks in bonded warehouses in the port of
Qingdao have jumped more than 11 percent in the past month to
around 340,000 tonnes.
Sunny Verghese, chief executive of commodity trader Olam
International, said stocks in China are likely to come down in
the next 6 to 12 months, allowing room for prices to harden.
The IRSG expects global rubber consumption to rise 4.4
percent in 2014 after posting a 2.5 percent increase last year,
driven by demand from Asia.
"Since prices were falling, everybody was liquidating
stocks. Inventory level is low in Thailand. Even a moderate rise
in demand can push prices higher," said Pongsak Kerdvongbundit,
honorary president of Thai Rubber Association.
(Editing by Clarence Fernandez)