Dear Sirs and Madams,

News reports pertaining to supply and demand are crucial in determining sentiments in commodity markets and natural rubber (NR) market is no exception.  NR futures prices are highly sensitive to reports on latest developments and policy changes which have potential implications on supply and demand of the commodity.  Therefore, authenticity of reports is crucial in maintaining transparency in natural rubber market. 

One of the priorities of the ANRPC is improving transparency and efficiency of NR market by providing authentic information gathered from its 10 Member Governments which account for around 94% of the global supply of the commodity.  ANRPC is the only information source on global NR supply which is 100% relied on official agencies in the respective governments.  Moreover, the Association is the fastest source as far as the data of NR supply is concerned.

It was quite unfortunate that a news agency’s report on NR supply, appeared in the third week of January 2010, had sent a negative signal to the market.  The wrong information provided in the report misled the market although it did not persist beyond a couple of days.  While totally disagreeing with the report, I would like to bring the following point:

(1)   Neither ANRPC nor any of its Member Country keeps any buffer stock of NR.  This being the fact, the possibility of releasing 300,000 tonnes into the market, as pointed out in the news agency’s report, was totally baseless.  In fact, the global NR industry is currently passing through a situation of tight supply thanks to a progressive decline in production and a rebound in demand. Fundamentals are now highly favourable for NR prices to stay high, if not bullish.  ANRPC had stressed this point along with supporting data, in the “Natural Rubber Trends & Statistics” released on 31 December 2009. 

(2)   Policies pursued in the major NR exporting countries are oriented towards ensuring the best price for NR with a view to protecting the interests of farmers and achieving improved performance in exports. This being the reality, the reported move to put a price cap for NR, is totally incorrect.  It may be recalled that these countries did not initiate any such measure even after NR prices reached unprecedented peaks in 2008 touching around 3.5 USD per kg. 

Before I conclude, I would like to add that ANRPC’s views and reports are fully based on information officially gathered from designated officials in Member Governments. The Association gathers information on policy changes and such key developments relating to NR supply in Member Countries and publishes on a monthly basis through “Natural Rubber Trends & Statistics”.  This is the most authentic source for keeping abreast with the global supply.

Thank you,

Prof. Dr. Djoko Said Damardjati
Secretary-General
ANRPC

Kuala Lumpur
21 January 2010