El NiÃ±o may affect natural rubber supply

Officials from the National Association of Natural Rubber Producers Association said on Monday that the El NiÃ±o phenomenon will further affect the production of natural rubber and support the price of rubber. The weather conditions have always been the focus of Thailand, Malaysia and Indonesia in the natural rubber producing countries. Today, affected by the heavy rainfall weather and replanting plan, the price of natural rubber began to rebound from the low of 1.1 dollars in December last year.
The secretary-general of the Association of Natural Products Producers said that if the El NiÃ±o phenomenon continues, it will become the next meteorological issue and the rubber output in Malaysia and Thailand will be further affected.
At the same time, he said it is difficult to tell how El Nino could affect the output of natural rubber, but we have seen that some of the production areas in Malaysia and Thailand have been greatly affected, because these production areas are north of the equator, per hectare. Production may be reduced from 1.5 tons to 1.3 tons.
In early June, the U.S. Bureau of Meteorology predicted that the El NiÃ±o phenomenon will continue in the coming weeks and will bring weather, such as droughts and floods, to Malaysia, Indonesia, and Thailand. The El NiÃ±o phenomenon is caused by anomalies in the sea water near the Pacific equator.
Affected by the decline in output of the three major rubber-producing countries, the National Association of Nail Glue Producers expects that global production of natural rubber in 2009 will drop by 2.2% to 89 million tons. The biggest drop in 16 years.
The drop in the supply of natural rubber offset the negative effect of the shrinking demand in the auto industry. The consumption of natural rubber in the auto industry accounts for 70% of the total output of natural rubber. At the same time, the growth of demand in the Chinese automotive market supports the market trend of natural rubber. This year's consumption in the Chinese auto market surpassed that of the United States, benefiting from the economic stimulus policies introduced by the Chinese government.
The Association of Producer of Natural Rubber states that low output and China's demand will keep the spot price of rubber this year above US$1.4. The major producers of natural rubber may not continue to reduce rubber exports, and supply is tight.

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