Global Natural Rubber (TSR) Prices Fluctuate Amidst Geopolitical Tensions and Weather Woes

Thailand: In October, the Natural Rubber (TSR) market experienced a rollercoaster ride of price fluctuations on a global scale, driven by geopolitical tensions and adverse weather conditions, but the overall market sentiments remained positive worldwide. The first major factor contributing to the fluctuation in Natural Rubber prices was the escalation of geopolitical tensions. Across the globe, political conflicts and uncertainties have injected an element of volatility into the market. This uncertainty has created ripples within the rubber industry, as geopolitical tensions often directly impact the production and supply chain. Adding to the situation's complexity, adverse weather conditions, particularly during the monsoon season in Natural Rubber-producing countries, have posed significant challenges. Thailand, a key player in the rubber industry, has experienced increased rainfall, which has led to flash floods and forest run-off. These adverse weather conditions have disrupted rubber production in the region, causing supply concerns.

During the initial two weeks of October, Natural Rubber prices experienced a significant increase attributed to geopolitical tensions and unfavorable weather conditions. However, the latter part of the month saw a change in market sentiment. The Japan Stock Exchange (JPX) noted a shift from a positive market outlook to increased speculative selling and profit-taking. In Osaka, rubber futures on Japan's OSE exchange declined by 1.0 percent compared to the previous week, and trading activity was notably subdued. The decrease in trading volume and open interest reached its lowest point since 1969, mainly due to an accelerated liquidation of positions.

China's SHFE and INE commodity exchanges also saw rubber futures prices drop by 0.3 percent and 1.7 percent, respectively. Even Singapore's SICOM rubber futures experienced a marginal decline as prices failed to sustain the recent rally, leading to long liquidation. JPX articulated the changing market patterns, highlighting that the prices of rubber futures have shifted from an overbought status to a more balanced stage, resulting in price stabilization. In addition to this, official warehouse rubber stocks increased at SHFE and INE as producers capitalized on the recent rally to sell and deliver physical rubber.

The Natural Rubber market may continue to experience fluctuations in the coming months. Recent developments, such as the 13th ANRPC Annual Rubber Conference and the 6th ANRPC Public-Private Meet, have provided a platform for meaningful interaction among Natural Rubber industry leaders, policymakers, and analysts from ten countries. During this significant gathering, ANRPC Member Governments endorsed the top three sustainability initiatives proposed by the ANRPC Secretariat as top priorities to be implemented from 2023 to 2025. These initiatives aim to enhance the sustainability of the Natural Rubber industry and align it with global environmental standards. Furthermore, on October 12, 2023, ANRPC Member Governments collectively released a statement during a meeting in Guwahati. In this statement, they called upon the European Union to implement the European Union Deforestation-free Regulation (EUDR) more equitably when it comes to the Natural Rubber industry. This plea underscores the importance of maintaining a balance between environmental conservation and the livelihoods of those in the Natural Rubber industry.