The Economist Intelligence Unit said in a report that it is cutting its forecast for global natural rubber consumption growth to 4.8% this year from 5.3% previously, as chips will affect the global auto industry in the short term.
But the agency said in its report that although it had cut its forecast for growth in rubber consumption, it expected consumption to grow strongly this year as the global economy recovers further and vaccination programs continue to push forward, allowing more economies to unfreeze.
Global rubber demand growth is expected to slow further but remain relatively strong in 2022, the report said, with consumption growth expected to be 3.1 percent next year, compared with its previous forecast for natural rubber consumption growth of 2.8 percent.
On the supply side, the agency said it expects global natural rubber supplies to rise 4.3 percent this year, mainly because of rising output since mid-2020. Global natural rubber output is down 5.5% in 2020.
Rubber output is expected to fall in almost all natural rubber producing countries this year, hit by bad weather, pandemic measures and Labour shortages.
The report expects natural rubber output to rise a further 2.2 percent in 2022, but the top three producers — Thailand, Indonesia and Malaysia — are planning to push ahead with replanting of rubber plantations, which will inevitably weigh on supplies.