Global rubber output to rise nearly 5% in 2011

* Damage to yield potential seen from overexploitation of trees

* Rubber output seen at 9.7m T in 2011 – ANRPC

SINGAPORE (Reuters): Global natural rubber output will rise nearly 5% in 2011, a senior economist of the ANRPC grouping of rubber-producing nations said on Monday, lower than 8% targeted by their governments, as record prices take their toll on yield.

“Farmers have already exploited available short-term means on the heels of abnormally high prices. Therefore, scope for further improvement in yield by short-term means is practically nil,” said Jom Jacob of the Association of Natural Rubber Producing Countries (ANRPC).

“There could be possible damage to yield potential due to unscientific over-exploitation of trees during 2010, prompted by abnormally high prices,” he told Reuters in an interview.  The ANRPC, whose members account for 92% of global production, pegged output at 9.7 million tonnes in 2011, an increase of 4.8% from 2010.

But governments set a more optimistic output target of 10.06 million tonnes in 2011, an increase of 8%, on expectations of better weather conditions and high prices. Natural rubber is mainly used in tyre-making.

Natural rubber prices are at an all time high above $6 a kg after a combination of dry and wet weather disrupted tapping in main producers last year, particularly in Thailand, Indonesia and Malaysia.

ANRPC members include the three Southeast Asia countries as well as Cambodia, China, India, Papua New Guinea, Philippines Singapore, Sri Lanka and Vietnam. ANRPC also accounts for 92% of global export and 48% of the global consumption of natural rubber.  “The existing yielding area is dominated by trees planted during the 1980s and the yields of those trees would have dropped drastically on account of ageing,” said Jacob.

“An assessment made by the ANRPC points to the supply rising by 4.8% during 2011, 5.2% during 2012, 6.3% during 2013, 7.0% during 2014 and 7.5% during 2015,” he added. ANRPC also accounts for 92% of global exports and 48% of the global consumption of natural rubber.

High prices have prompted some buyers to withdraw from the physical market, but this move could be temporary.  Natural rubber imports by China, the world’s top consumer, dropped 14% to around 147 million tonnes in January versus a year ago.

“ANRPC observes that dominant buyers have strategically withdrawn for a while. It may be a temporary break,” said Jacob.

“Given the current growth in automobile and tyre manufacturing industries, and the huge potential available in China and India, one cannot expect the demand slowdown to continue.”  Car sales in China rose 33.2% in 2010, securing the country’s position as the world’s biggest auto market for a second straight year, official data showed. A total of 13.8 million sedans, sport utility vehicles and multi-purpose vehicles were shipped to dealers last year, the China Association of Automobile Manufacturers (CAAM) said.

The Singapore-based International Rubber Study Group expects global demand for rubber – both natural and synthetic – to reach 25.5 mln tonnes in 2011, higher than 23.9 million in 2010.