The continuing slump in natural rubber (NR) prices could be storing up problems for buyers further down the line, according to Sri Trang Agro-Industry Public Co Ltd.
“Rubber farmers are demoralised by the low NR prices and reduce tapping activities. All of this could conceivably lead to a shortage of labour and, eventually, a shortage of NR supply,” the Thai group warned in a second-quarter results announcement.
The past few months have seen a rally of NR prices from lows in the first-quarter, said Sri Trang, which linked the recovery to drought and a prolonged wintering period brought on by El Niño,
The weather affect coupled with the imposition of an export quota by Thailand, Malaysia and Indonesia, led to a decrease in NR supply, the group noted. This, in turn, accelerated purchasing activities, which further helped support NR prices.
Following the volatility in Q2 2016, the NR market ...