BANGKOK: The global rubber price is expected to see an upward trend in the second half (H2) of next year and may hit US$2.45 (US$1= RM4.13) per kilogramme (kg) as early as 2022.
ALA Advisors Pte Ltd chief Investment Officer Dar Wong said the rubber price was likely to fall again in first half of 2021 and then make a ‘V-shaped’ recovery after mid-2021.
“From now until January next year, we are expecting the rubber price will move sideways between US$1.30 and US$1.70 per kg. When the market breaks out at US$1.70 per kg, the rubber price will start to climb up.
“If the rubber price starts to recover starting next year, it will go like a waveform, eventually it will hit the high between 2022 to early 2024.
“I believe it will hit a new high than what we saw in 2011,” he said during the Global Rubber Conference (GRC) held via a hybrid format, both in-person attendees and remote viewers.
Wong said the prices of commodities, including rubber, move inversely to the dollar.
He said a weaker US dollar tends to boost all dollar-denominated commodities and when US dollar recedes in boom-bust cycle, the rubber price will recover or even reach a new high.
He projected the rubber price to gradually increase when the new US President draws up a new budget to fight economic slowdown in March or April next year.
Meanwhile, the Association of Natural Rubber Producing Countries (ANRPC) secretary-general R. B. Premadasa said the global rubber production was expected to witness further capacity addition until 2023 and stagnate thereafter.
“If prices turn attractive coinciding with the stagnation of mature areas between 2023 and 2024, farmers are expected to adopt short-term measures to maximise the yield from existing trees. In that case, average yield from existing mature trees can improve in the next one year.
“The market is expected to feel tight supply starting from 2024 or 2025 even if the demand increases at a normal growth,” he said.
Meanwhile, Premadasa said the global rubber production for this year is projected to drop 6.8 per cent to 12.90 million tonnes from 13.84 million tonnes last year, while rubber consumption will fall 7.3 per cent to 12.76 million tonnes from 13.77 million tonnes.
