Rubber consumption growth rate highest in decades.

The International Rubber Study Group has revised its forecast for rubber consumption this year, and now says the growth rate will be the highest since the 1970s. Rubber consumption, estimated at 19.08 million metric tons in August, has been running above its long-term trend over the last few years. Although growth registered 8% in August, it falls short by historical standards, and has decelerated in recent months due to a slowing in the world economy, according to the IRSG.

Focusing on regional trends reveals that rubber consumption has been expanding in all regions, led primarily by strong growth in North America and in the Asia/Pacific regions. The IRSG says the share of SR in total rubber uptake remains at around 59%.

The IRSG's latest forecasts now indicate that world total NR and SR demand should rise by 8.3% from 18.11 mmt in 2002 to 19.62 mmt in 2003. The growth rate is then expected to slow down in 2004 to 4.9%, with rubber consumption likely to reach 20.59 mmt.

The group says that NR and SR consumption will grow at a similar rate of just over 8% in 2003, but the former will show a lower growth rate of 4.5% as compared to 5.2% for 2004. The growth in 2003 is led by North America (12%) and Asia/Pacific (8.8%), followed by the European Union (6.1%), Latin America (5.2%), other Europe (5.1%) and Africa (3.2%). Their growth rates are expected to show a degree of convergence in 2004, and are expected in the range of 3-6%, the IRSG claims.

World NR production is forecast to grow by only 1.7% in 2003, before picking up relatively sharply, by 5.2% in 2004. The IRSG says if this proves to be true, global stocks will continue to fall further, with consequences for rubber prices. As for the major producing countries, growth rates in Malaysian and Thai output are expected to hit 10.5% and 6.3%, respectively. Other countries, meanwhile, include Indonesia (4.7%), other Asia (4.0%), Africa (2.2%) and Latin America (1.6%).

In 2004, the incentive of high prices, in response to falling stocks, will influence output in Thailand, Indonesia and Malaysia to grow in excess of 8%.

Following consumption, world SR output is expected to grow by 6.6% in 2003 and 5.1% in 2004. North America (9.5%) will be the key region here, follow by other Europe (7.7%), Asia/Pacific (6.0%), the European Union (5.0%) and Latin America (4.0%). Asia/Pacific is expected to perform best in 2004, with a growth rate expected to exceed 6%. Other regions will post an expansion in the range of 4-5%.

[GRAPHIC OMITTED]

World rubber consumption forecasts ('000 metric tons)

                  2002     2002     2002    2003     2003     2003
                    NR       SR    total      NR       SR    total

North America    1,259    2,123    3,382   1,435    2,354    3,789
Latin America      433      658    1,090     458      689    1,148
European Union   1,021    2,279    3,300   1,097    2,406    3,503
Other Europe       314    1,127    1,441     334    1,180    1,514
Africa             128      108      236     130      114      244
Asia/Pacific      4167    4,281    8,449   4,481    4,710    9,191
World            7,400   10,710   18,110   8,020   11,598   19,617

                      %    2004     2004     2004        %
                 change      NR       SR    total   change
                  02-03                              03-04

North America      12.0   1,503    2,459    3,962      4.6
Latin America       5.2     487      737    1,224      6.6
European Union      6.1   1,157    2,488    3,645      4.0
Other Europe        5.1     356    1,233    1,588      4.9
Africa              3.2     134      118      252      3.2
Asia/Pacific        8.8   4,658    5,017    9,675      5.3
World               8.3   8,381   12,205   20,585      4.9