CS Agriculture rubber Feb 14

Commodity Spotlight Agriculturals

Natural rubber: Continuing oversupply weighs on prices

The rubber price hit a multi-year low in late January, as the market for natural rubber is driven by a combination of rising supply and concerns about weaker demand. Many of the plantations set up several years ago when prices were high will now be harvested for the first time, pushing supply further up. On the demand side it is especially weaker economic data from China, the world’s largest rubber consumer country, that are clouding the outlook. In 2014, supply looks set to exceed demand for the fourth consecutive year. This makes large price surges appear unlikely.
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