KL's rubber output expected to decrease<\/p>\n
KUALA LUMPUR (Reuter): Malaysia's rubber output is expected to
\nfall 3.23 percent to 1.05 million tons this year as estates
\nconvert land to other uses and growers cut crop size because of
\nlower prices, officials said yesterday.<\/p>\n
Production for the first six months of 1996 is estimated to
\nhave fallen 5.48 percent to 495,000 tons, a decrease from 523,694
\ntons in the same period of 1995, the Malaysian Rubber Research
\nand Development Board (MRRDB) said.<\/p>\n
Production for the full year has been forecast at 1.05 million
\ntons, down from an earlier estimate of 1.07 million tons and 1.09
\nmillion tons produced in 1995, MRRDB research officer Chew Cheng
\nSim told Reuters.<\/p>\n
"It's basically down because of the conversion of rubber
\nestate land. Smallholders will also be cutting back on growing
\nbecause of weaker prices this year," Chew said in an interview.<\/p>\n
Area under rubber cultivation fell by one percent to 1.7
\nmillion hectares (4.3 million acres) last year, officials said.
\nNo estimates were available for this year.<\/p>\n
Chew said the benchmark International One Ribbed Smoked Sheet
\n(RSS1) was traded at an average of 381.75 cents (US$1.53) a kg
\nfor the first six months of this year, down 11.4 percent from the
\naverage of 430.67 cents in the same period of 1995.<\/p>\n
Standard Malaysian Rubber 20 (SMR20), another important
\nindustry gauge, was traded at an average of 354.01 cents a kg, or
\n16.4 percent lower than the 423.53 cents in the corresponding
\nperiod of 1995.<\/p>\n
"We feel both the RSS1 and SMR20 should be trading at average
\nof between 340 and 350 (cents) for the full year," said Chew.<\/p>\n
RSS1 closed at 323 cents a kg on Tuesday for the current
\ntrading month while the SMR20 closed at 301.50.<\/p>\n
Chew said the MRRDB's main concern this year was whether
\nAmerican tire makers and other consumers would be cutting back on
\nimports due to a depressed U.S. economy.<\/p>\n
The United States was the largest importer of Malaysian rubber
\nlast year, buying 125,000 tons.<\/p>\n
Safic-Alcan, a major rubber dealer in Asia, said in its 1996
\nforecast that economic and industrial growth rates in both
\ndeveloped countries and Asia this year did not appear promising.<\/p>\n
"The market structure, which has prevailed recently, leads to
\nbelieve in a strong reluctance from the industry to accept new
\nprices," J.M. Seyman, vice-president of Safid-Alcan said.<\/p>\n
"Consumers have shown that they were flexible enough to
\nwithdraw from the market at any time if they considered the price
\nincreases as unacceptable, in order to wait for lower levels,"
\nSeyman said.<\/p>\n
He said a sustained demand by China in order to rebuild its
\nstocks could be offset by a weaker consumption in Europe and
\nNorth America.<\/p>",
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