World supply of natural rubber (NR) is expected to rise by 5.5% to 12.756 million tonnes during 2017, marginally lower than the figure anticipated a month ago. The figure reported in the previous month was 12.771 million tonnes at 5.7% growth.
The supply is likely to be revised-down further in view of the downswing in NR prices from the last week of May 2017. Prices of SMR-20 at Kuala Lumpur market fell from US$ 157.90 per 100 kg on 23 May to US$ 138.80 per 100 kg on 7 June, says the latest statistical report issued by Association of Natural Rubber producing Countries (ANRPC).In response to the further fall in prices, a section of farmers is expected to reduce frequency of harvesting and delay reopening tapping on expiry of wintering off-season.
Moreover, the original projection assumed that 630,000 hectares of trees, planted during 2010, would be newly opened for tapping by June 2017 coinciding with the beginning of new crop-year. Due to the prevailing low prices, a portion of this area may not be opened for tapping, says the report adding that during a low phase of prices, farmers are generally reluctant to open young trees for tapping.
The anticipated faster growth in supply in Cambodia (35.3%) and India (20.2%) are because of the expected expansion of the area to be tapped during the year. Acreage of trees to be tapped is expected to expand by 47,000 hectares in Cambodia and 44,000 hectares in India during 2017. In Thailand, even though the tappable area is expected to expand by 198,000 hectares during 2017, the supply is anticipated to increase only by 5.1% as the floods during the first two months of the year have shaved out a considerable volume of output, says the report