The Hindu Business Line : Natural rubber supply, demand gap to narrow

THE International Rubber Study Group (IRSG), an international organisation on world rubber industry, has projected a stronger growth in consumption of natural rubber in 2005 and 2006 vis-à-vis production, thereby narrowing down the demand-supply balance.

IRSG has also forecast that natural rubber usage will grow at 5.5 per cent to 8.72 million tonnes in 2005, outpacing synthetic rubber consumption, which will grow by three per cent to 12.01 mt.

Production of natural rubber, on the other hand, will rise by 1.7 per cent to 8.78 mt. Synthetic rubber will grow by 2.1 per cent to 12.22 mt, IRSG said, adding that a narrowing of the supply-demand differential is expected in both the categories in this year.

Aggregate rubber use is expected to increase by four per cent in 2005 to 20.73 mt.

The projections were announced at the 41st assembly of Nations of IRSG, held in Sri Lanka last month.

In 2004, rubber consumption grew by an estimated three per cent to 19.88 mt, with growth in natural rubber use outpacing that of synthetic rubber.

One of the reasons for this is that synthetic rubber prices were ruling strong during the year on account of high crude prices.

"With assumptions of economic conditions fostering further growth in rubber consumption, total usage is projected to rise by about 4 per cent in 2005 and 2006. In both years, Asia-Pacific is expected to exhibit sound rates and provide a solid push to global consumption growth," IRSG said.

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