ANRPC urges members to increase demand
ANRPC urges members to increase demand
COLOMBO (Reuters): An international eight-nation grouping of
rubber producing countries yesterday expressed concern over the
decline of prices over the last two years and urged its member
countries to take corrective measures.
The Association of Natural Rubber Producing Countries (ANRPC)
however said that it was not in favor of imposing rubber
production quotas on member countries since it could send the
wrong signals.
"We are not thinking of any quota system, only looking at
positive directions to increase consumption of natural rubber,"
J. Lalithambika, secretary-general of ANRPC told Reuters in an
interview.
"Quotas will send the wrong signal. Our intentions are to
increase the production of natural rubber. We are careful not to
send wrong signals," she said.
"(At the same time) we may have to coordinate supply and
demand. It is difficult to stop supply, it is not practical. On
the long run it is not good for the producing countries to
curtail supply," she said.
Lalithambika was speaking at the conclusion of a meeting of
ANRPC member nations in the Sri Lankan capital Colombo, where the
association resolved that member countries should implement
measures to encourage domestic consupmtion.
A statement from the association said that the recent apparent
upturn in natural rubber prices was primarily due to the
depreciation of currencies of major rubber producing countries.
But the cost of production of rubber has been rising and in
the light of the decline in real price, the production sector is
facing severe constraints, the statement added.
"The livelihood of the smallholders had been adversely
affected in the producing nations and that this will affect the
future production capacity of these countries," it said.
Lalithambika said that the global natural rubber production is
estimated to rise to 6.72 million tons next year against 6.49
million tons in 1997.
"Natural rubber consumption will also increase to 6.61 million
tons in 1998 against 6.4 million tons this year," she said.
Rubber production in 1996 was 6.34 million tons while consumption
was 6.13 million tons.
"The year end stock of natural rubber in 1998 will again go up
to 2.05 million tons from 1.95 million tons at the end of this
year," she said. Stocks at the end of 1996 were 1.86 million
tons.
She said that production growth had outpaced rise in
consumption and had led to a decline in rubber prices.
"Basically, supply had outweighed demand and this had a
negative effect on natural rubber prices," she said.
"Though this presents a gloomy scenario, rubber prices may
still improve in 1998 since the economy of the major developed
countries is expected to register an upward growth. Moreover in
the case of rubber price, market sentiments play a significant
role," she added.
However the association has acknowledged that there could be a
short supply of natural rubber in the next century based on
forecasts of several institutions.
"In order to sustain the present growth in the supply of
natural rubber, measures have to be adopted to alleviate the
current situation," it added.
The ANRPC comprises of eight rubber producing countries
including Sri Lanka, Thailand, India, Indonesia, Malaysia,
Singapore, Papua New Guinea and Vietnman.