By Supunnabul Suwannakij
A global glut of natural rubber will probably expand next year as production increases at a faster pace than consumption, according to the Rubber Economist Ltd.
The surplus may climb to 366,000 metric tons from 336,000 tons in 2013, said Prachaya Jumpasut, managing director of the industry adviser, in a report published Monday.
Futures traded in Tokyo, Japan, slumped 9.8 percent this year as output increased and on concern demand is slowing in China, the world’s biggest consumer.
Global use may expand 3.1 percent to 11.599 million tons next year, less than the 4.1 percent growth estimated in September, the report showed.
“The downward revision in the demand forecast is due to a slower-than-expected recovery in many consuming countries,” said Prachaya, who has studied the commodity for more than 30 years.
The Chinese economy has failed to show a significant recovery this year, he said. China, the world’s second-biggest economy, will expand 7.4 percent in 2014, according to the median estimate of 48 analysts surveyed by Bloomberg News from Dec. 18-23. That would be the slowest pace since growth of 3.8 percent in 1990.
Production will climb 3.3 percent to 11.965 million tons next year, compared with an earlier estimate of 3 percent, according to the report.
Increases in Vietnam and smaller suppliers such as Myanmar and Cambodia contributed to the higher forecast, said Prachaya.
Output in Vietnam may rise 1.5 percent to 995,000 tons next year, after climbing 14 percent to 980,000 tons in 2013, beating Malaysia to become the third-largest grower, the report showed.
In Thailand, the top supplier, output is set to advance 4.2 percent to 3.74 million tons, while Indonesia may post a 2.1 percent increase to 3.16 million tons.
Futures on the Tokyo Commodity Exchange traded at $2,628 a metric ton on Tuesday.