The supply and demand for rubber may be balanced in 2019
The supply and demand for rubber may be balanced in 2019; however, the rubber market may not fully be escaped from the oversupply pressure in case the price recovers to an attractive level. In addition, the production of many countries will increase compared to the expected.
Forecast on rubber market in 2019 from Import and Export Department (Ministry of Industry and Trade), said natural rubber price may be difficult to increase strongly since the world economy may slow down. In addition, low crude oil prices are expected to support the demand for synthetic rubber. According to the U.S. Energy Information Administration, Brent crude oil prices may average US $ 61 / barrel in 2019, much lower than the preliminary estimate of US $ 71.4 / barrel in 2018.
The matter of slowing down in the consumption of natural rubber while the supply is ready to increase when the price of rubber becomes attractive, can lead to pressure on the rubber market. Although being lower than the 5.2% increase in 2018, global natural rubber consumption is expected to increase by 4.2% in 2019, reaching 14.59 million tons. In China, natural rubber consumption is expected to grow 3.2% in 2019 to 5.85 million tons, while that in India is forecasted to increase by 4% in 2019.
The year 2019 is also expected to have the world rubber production being close to the consumption level, with an estimate of 14.84 million tons. According to the Import and Export Department, a part of rubber plantation area in the period of 2010 - 2012 when the world price of rubber reached a peak will begin to harvest latex in 2019.
It is projected that Thailand will increase by 200.000 hectares in 2019 and the area of rubber up to the time of the highest latex output in Ivory Coast, Myanmar, Cambodia, Laos and Brazil will also increase. Meanwhile, Indonesia, Vietnam, China, Malaysia and India are expected to witness a slight increase in production.
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