Latest News

RUBBER NEWS INT'L: Natural rubber now a critical raw material for EU
(Last Updated: 09 Oct 2017)

 

 

Natural rubber now a critical raw material for EU

IRCO-rubber plantation-NR-3Brussels  – Natural rubber has been included on the EU’s ‘critical raw material list’, the European Tyre & Rubber Manufacturers’ Association (ETRMA) has reported.

Inclusion on the 2017 listing – valid for three years – means the EU has recognised the need “to ensure the secure, sustainable and affordable supply for the EU manufacturing industry.”

NR was the only biotic raw material among the 27 out of 61 candidate materials to pass the EU listing…

 

Malaysia: Rubber, Rubber Product Exports To Hit RM20 Bln Target, Says Ministry

0
131
 KUALA LUMPUR — The Ministry of Plantation Industries and Commodities expects and  product exports to hit this year’s RM20 billion target due to buying support mainly from the US, , China and India.

 

 

Its Minister, Datuk Seri Mah Siew Keong, said between January and  2017, rubber and rubber product exports rose by 38.5 per cent to RM19.1 billion from RM13.8 billion during the same period last year.

In 2016, exports of rubber and rubber products stood at RM18.1 billion.

  

He said this was partly due to the decision by some importing countries to switch to natural rubber (latex/nitrile-based) gloves from vinyl gloves, noting that the former were produced in .

Mah said this to reporters after launching the Malaysian  Promotion Council (MREPC) Industry Linkage Fund (ILF), themed ‘Enhancing Competitiveness Through Research Collaboration’, here today.

He said the ILF was an effort to create a complete eco-system to support the development of the rubber products industry in terms of market promotion, research and development and human capital.

MREPC’s ILF started with an initial fund of RM3 million, to be awarded either as a full research fund or as a matching grant.

The full research grant would be awarded to projects which offer industry-wide solutions, while the matching grant would cater to specific projects that would benefit individual companies, especially small and medium enterprises.

Meanwhile, Mah said, for the coming budget, his ministry had sent a proposal to the government to extend the reinvestment allowance for manufacturers beyond 2018.

“We hope  will be extended as the manufacturers have long-term plans for their businesses, and they need some time to implement them,” he said.

Previously, under the 2016 Budget, the government had accorded reinvestment allowance of up to 60 per cent of the allowed capital expenditure for manufacturers for the 2016-2018 period.

— BERNAMA

 

Thai Rubber Development Plan for the Next 20-year Is on the Way

0
247
 

On September 9, Director of Rubber Authority of Thailand (RAOT) said that the RAOT would conduct a final review of a draft for the 20-year Thailand  development. If the draft is passed,  will become the first Thai national rubber development plan. Thus, the rubber consumption in Thailand may be stimulated, and the rubber farmers’ income will be improved.

The 20-year Thai national rubber development plan sets the prospect of the rubber industry development, which is that Thailand will become the world’s largest country in rubber planting, processing and exporting. Thailand wants to purse a decisive role and authorities in the international . Besides, the rubber consumption volume in Thailand will take 30% of the total rubber output, and the current proportion is 14%. The annual export value of both rubber feedstock and  will reach 800 billion THB. The foreign investment value attracted to the  industry will reach 2 billion USD per year.

The 20-year Thai national rubber development plan can be divided into four stages, and every stage contains five years. In the first stage of plan, the key objective is to improve the rubber output and the production efficiency. In the second stage of the plan, the goal is to develop and explore both the Thailand and international rubber markets. In the third stage, innovation and research in the rubber related industry needs to be promoted with great effort. In the last stage, the aim set in the national rubber development plan is to improve the management capabilities in the all-round rubber industry. Make Thailand become the world’s largest country in rubber planting, processing and exporting is the final target in the plan.

The draft of the plan includes 5 strategies and 19 tactics, mainly for stimulating the rubber consumption volume in Thailand, improving the , strengthening rubber farmers’ operation, and cultivating Smart Farmers. By cooperating with the international research institutes, the Thai rubber players can strengthen scientific innovation and develop high value-added products.

  • Source: sci99.com

 

 

Indonesia: Rubber farmers cry for help

0
277
 

The government should look seriously into the grievances of rubber farmers who have been complaining about low prices over the last five years. True, the price of rubber, like most other commodities, such as palm , cacao and coal, is mainly influenced by global supply and demand, especially for , which, as the world’s second largest producer, exports more than 80 percent of its output.

Indonesia: Rubber farmers cry for helpA worker collect rubber latex from a plantation in Batam. (Antara/Aditiya Pradana Putra)

But the core of the rubber farmers’ grievances, which were raised by the industry and farmer associations at a working session with the agriculture commission of the House of Representatives on Monday, is that the prices in the country are half of what rubber growers in Thailand and  have enjoyed.

The price of rubber, like most commodities,replica4luxury declined from as high as US$5 per kilogram in 2011 to as low as $1.2 in 2015 due to the global production surplus and declining demand, notably in . Although the prices rose last year to more than $2 per kg, this is likely unsustainable because the price increase was rather artificial, not generated by real market forces but by a joint move by Indonesia, Malaysia and Thailand, which together account for 80 percent of the global output to cut supplies to the international market under an agreed export tonnage scheme.

 

Despite the moderate price rise generated by the cartel-like move, most rubber farmers in Indonesia continue to earn only half of what rubber growers in Thailand, the world’s largest producer, and Malaysia, the third largest producer, enjoy.

The farmers’ grievances deserve the government’s attention because, strikingly different from palm oil, more than 85 percent of the estimated 3.6 million hectares of rubber estates in the country are owned by smallholders. The industry association reported that rubber plantations employed around 2.5 million workers and contributed $3.4 billion to the country’s export earnings last year.

 is most urgent for the agriculture ministry, notably the directorate general of plantations, to act firmly to help the farmers.  should not be done by subsidizing their rubber, as the Thai government did when  spent billions of dollars to support the Thai farmers, because such a policy would only distort the market and is by no means sustainable.

Rather, the government should investigate as to why our farmers have been dealing with such low prices, compared to their counterparts in other major rubber-producing countries. The directorate general of plantations should look into the structure of relations between the smallholders and rubber-processing companies.

The government should also act firmly in regard to the findings of several studies that show the yield of our rubber plantations is only half of that in Thailand and Malaysia due to aging trees. The quality of Indonesia’s latex is very low because of poor  practices.

Mutually beneficial collaboration between rubber-processing companies and smallholders under government oversight, as widely implemented between big oil palm plantations and smallholders, could be an effective partnership model to solve the problems of low yield and poor quality because they need each other for survival.

 

Current Natural Rubber Price Trend Not Reflective Of Fundamentals

0
297
 

BANGKOK, THAILAND–(Marketwired – Aug 28, 2017) – A Joint Meeting between Senior Officers of the International Tripartite Rubber Council (ITRC) and Board of Directors of the International Rubber Consortium (IRCo) has concluded that the current price of Natural Rubber (NR) is not reflective of the economic fundamentals that affect it.

While the three Member Governments — Thailand, Indonesia & Malaysia — expressed concerns that the current downward rubber price trend and market factors are unrealistic, they are also confident on the health of NR market and that prices should adjust to reflect the fundamentals.

The recent meeting discussed the wellbeing of rubber smallholders and rubber industry in their countries, factors contributing to the rubber price and possible measures to improve NR prices.

Both ITRC and IRCo are encouraged by the findings of various technical analysis of the price movements on the  Commodity Exchange (TOCOM), Shanghai Futures Exchange (SHFE) and Singapore Commodity Exchange (SGX) that indicates that the market is entering a consolidation phase, signifying the establishment of a new momentum to set a new direction for the market.

 

Also supporting the indication of a consolidation phase is the analysis of the — the total number of open or outstanding (not closed or delivered) futures contracts that exist on a given day, delivered on a particular day — movement which confirms that TOCOM, SHFE and SGX are in oversold positions, leading to short covering in the .

The analysis is further supported by prevailing fundamentals as 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 change in weather pattern,panerai replica compounded by unusual heavy rains in northern Thailand which affected rubber production there.

It is also expected that NR consumption for 2017 will increase further, supported by better world GDP growth, where the positive GDP growth of major economies and improving commodity indices will further enhance the sentiment in NR markets.

Meanwhile, the revised estimates in the July forecast of the International Monetary Fund (IMF) of the world GDP growth to 3.5% for 2017 is higher than its earlier January forecast of 3.4% and higher than the 2016 GDP performance of 3.2%.

The GDP of all major NR consuming countries including USA, Japan, EU and India are all forecast to improve, while ’s GDP is forecast to remain at 6.7%.

China’s actual  in 1Q17 and 2Q17 at 6.9%, which has already exceeded its forecast growth, is its strongest performance in 18 months and indication of a strong demand side.

Automobile sales in the first 6 months of this year in major NR consuming countries — China, EU & Japan — also recorded a positive growth of 3.8%, 4.7% and 9.2% respectively.

“We strongly believe that all these fundamentals and consumption patterns have resulted to an improvement of the NR stock-consumption ratio from 3.02 at the beginning of 2016 to 2.38 in July 2017 and is expected to further decrease to 2.34 by the end of 2017,” said IRCo Board of Directors Chairman Mr Mesah Tarigan.

Meanwhile, the Association of Natural Rubber Producing Countries () has forecast a deficit in global supply-demand of NR in 2017 even though its projection has not taken into consideration the potential deduction of NR production in Thailand and Malaysia due to low prices and changes in weather pattern.

ITRC and IRCo will continue to monitor and analyse the market trend as well as explore other possible measures towards strengthening NR prices to ensure that the smallholders in the ITRC Countries will benefit from remunerative income.

In addition, focus will also be given by the three member countries to balance long term supply and demand and in this regard, are were encouraged by plans of the Thai Government to permanently remove 240,000 ha of rubber area which will permanently remove the supply of 360,000 MT of NR per year.

Thailand, Indonesia and Malaysia will continue to explore long term measures to enhance domestic consumption of NR and are committed towards cooperation under the framework of ITRC to ensure long term price stability of NR.

About the International Tripartite Rubber Council (ITRC) & International Rubber Consortium Limited (IRCo) ITRC member countries account for 65% of global natural rubber (NR) production and 72% of world NR exports.

The International Rubber Consortium Limited (IRCo) is a company co-owned by the three major producers and exporters of NR — the Government of the Royal Kingdom of Thailand, Government of the Republic of Indonesia and Government of Malaysia.

For further information, please contact: Mr Muhammad Fadzil Abd Rahman Chief Secretary and Economist International Rubber Consortium

 

 

 

 

 

 

 

 NR supply, demand doesn't square with price trends
Comments Email 
Photo by Leo Michael

 

 

 

 

 

 

Some things in life just don't make sense. Take the current state of natural rubber pricing supply and demand. According to the Association of Natural Rubber Producing Countries, there's a current worldwide NR shortfall of about 700,000 metric tons.

The group does expect the supply gap to close considerably to 466,000 tons by September and just a bit more than a 100,000 tons by December. So right now, prices should be climbing, correct? That's if NR pricing followed the normal course where tight supplies should equate to rising prices.

But that's not even close to being the case. The going rate for Standard Malaysian Rubber 20—the common Malaysian tire-grade rubber—was 242.95 cents per kilogram on Jan. 31. As of July 27, however, the commodity was going for a mere 152.6 cents, a whopping decrease of 37 percent.

 

Of course, natural rubber isn't your normal commodity, as a wide range of factors can impact pricing. Some of the variables cited by the ANRPC during the first half included: bad weather in Thailand; speculation in Asian commodity markets; and the strength of the U.S. dollar against Asian currencies.

Other factors, though, matter even more. The members of the International Tripartite Council—Thailand, Indonesia and Malaysia—are trying to keep prices higher by restricting exports.

It's also estimated that more than 5 million small farmers in Southeast Asia are trying to make their living from tapping Hevea trees, and the U.S. gets at least 90 percent of its NR from the region. But when prices remain low, the small NR farmers are reluctant to tap or replant trees that bring in such a low return. That will lead to long-term issues, where tapped areas will be abandoned, more Hevea acreage will go unused, and small farmers will turn to other more profitable crops when possible.

 

So far it doesn't appear that the world's tire manufacturers—the largest consumer of NR—are too concerned about the supply shortage. Continental said it hasn't stopped it from getting all the NR it has needed so far this year. The firm also expects that prices for NR will remain volatile given the variety of market conditions impacting supply and demand.

Long term, the situation with NR could be a boost for the variety of alternative sources for natural rubber that are be developed, including the dandelion research Continental is involved in along with the various guayule projects that are moving forward.

These efforts, though, won't yield the necessary results for some time. Ambitious forecasts say guayule won't be much of a factor for at least 10 years, while rubber from dandelions is even further down the road.

So for now, NR consumers have little choice but to continue to ride with the ups and downs of the volatile NR market.

 

 

Thailand to host rubber council meeting amid price worries

0
726
 [BANGKOK] Asia’s top rubber producers will meet in Thailand in September, an official at Thailand’s rubber authority said on Wednesday, with export curbs to help boost prices likely to be on the agenda.

The  (ITRC), made up of the world’s top producers of natural rubber Thailand,  and , normally meets once a year. “The ITRC meeting usually discusses a range of issues including export mechanisms … the important thing is ministers from the three countries will hold discussions,” Nakorn Tangavirapat, Deputy Governor of Rubber Industry and Rubber Production Rubber Authority of Thailand, told Reuters.

, which have suffered in recent years from oversupply, surged late last year after floods in key growing regions, but have since largely subsided.

Thailand, Indonesia and Malaysia together produce nearly 70 per cent of the world’s natural rubber. The three countries agreed last year to cut exports to boost the market, but their targets have not aways been met.

 

Mr Tangavirapat said Malaysia had formally accepted an invitation for the Sept 12-15 meeting, while Indonesia had yet to confirm.

Senior officers from the ITRC and the board of its operational arm, the International Rubber Consortium (), met on Aug 3 in Bangkok, according to an ITRC press statement.

They expressed concerns “on the current downward  trend” and discussed measures to improve the price of rubber, the statement said.

Officials expect rubber output from Thailand and Malaysia to decline this year due to low rubber prices and bad weather, including heavy rain and floods in northern Thailand.

Benchmark TOCOM rubber futures edged lower on Wednesday as investors made position adjustments amid light trade, with many dealers away for summer holidays.

REUTERS

 

 

Natural Rubber prices remain low despite supply shortfall

0
343
 WASHINGTON—There is a current worldwide natural rubber supply shortfall of about 700,000 metric tons, according to recent reports from the Association of Natural Rubber Producing Countries.

Despite that shortfall, NR pricing has declined since the beginning of 2017, ANRPC data show.

 

 Standard Malaysian Rubber 20, or Malaysian tire-grade rubber, began the year Jan. 3 at 205.9 U.S. cents per kilogram, and enjoyed an increase to 242.95 cents by Jan. 31, according to the association. Prices sank slowly through the spring to 138.1 cents on June 23 before edging up to 161.7 cents July 20.

 

By July 27, SMR 20 slipped again, to 152.6 cents per kilo. Other grades of rubber tracked by the ANRPC and its members showed similar patterns in the first seven months of 2017.

“NR Markets Close Out the Month Marginally Higher” was the headline for rubber trading firm RCMA Group\’s July 31 newsletter. NR prices struggled to recover from a slump on Chinese commodity markets the previous week, the RCMA newsletter said.

The world NR supply shortfall stood at 688,000 metric tons by June 2017, according to the ANRPC. However, the association said the shortfall would narrow to 466,000 tons by September and 103,000 tons by December.

Any number of factors contributed to the anomalous supply-demand situation, according to the ANRPC. Bad weather in  early in 20