Predictions on rubber market changes in 2019
Rubber market changes has always been a special concern of not only growers but also rubber consumers. Recently, some experts from the Associations have forecasted rubber prices in 2019.
"In the next 6 months, prices can increase by 1.7USD/kg"
It is forecasted by Mr. Dar Wong - Head of Strategic Advisory Board of Bain Partners & Management, a member of the International Rubber Research and Development Board (IRRDB).
According to Mr. Dar Wong’s forecasts of short-term rubber market, in the next 6 months, the price of natural rubber can increase from 1.2 to 1.7 USD / kg. Particularly during 2019, prices may be slightly higher than 2018 and may fluctuate up and down continuously. In particular, thanks to the stability of the US dollar in the 90-day Trade Truce between the US and China, rubber prices will have a chance to go up.
Some factors may have a significant impact on rubber prices next year including the USD exchange rate, interest rates and oil prices. Specifically, if oil price goes up to 80 USD / barrel, rubber price will have a chance to increase to 2 USD / kg.
In the long term perspective, global demand for rubber will increase in the next 5 to 10 years, which will positively support the price increase. At that time, rubber prices will not be too high, but at acceptable levels.
World natural rubber production is forecasted to increase by 5.8%
Mr. Jom Jacob - Senior Economic Specialist Association of Natural Rubber Producing Countries (ANRPC) predicted that the situation of supply and demand along with other factors such as stronger dollar exchange rate, rubber consumption growth and a slow in China's natural rubber due to the US tax policy, will not benefit the recovery of natural rubber prices in 2019.
However, world natural rubber production is projected to increase 5.8% to 14.696 million tons in 2019 if natural rubber prices continue at current levels. Besides, natural rubber consumption is predicted to reach 14.73 million tons, up 3.6% compared to 2018. However, this development may not be strong enough to create a balance of supply and demand to benefit prices. This is said to last at least until 2021 - 2022.
"Price can reach 1.8 – 2.0 USD / kg in 2025"
Mr. Hidde Smit - Former Secretary General of International Rubber Study Group (IRSG) said the possibility of increasing supply and demand in the future could start to push up the price of natural rubber within 5 - 6 years and price increases may continue in the 2030s.
The current situation of excess rubber may turn to deficit with reduced consumption. Although this has a positive impact on rubber prices, prices will not increase much. It could be 1.8 USD or 2 USD / kg in 2025 or later years.
According to Mr. Hidde Smit, the supply of natural rubber in the long term depends on the demolition, replanting and new planting in the next 05 - 10 years. However, there will be changes in the current production trend as well as the consumption in the near future.
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