Kuala Kumpur: Natural rubber output in Malaysia, the world's third-largest grower, may rise 17 per cent this year, lifting shipments of the commodity used in tyres, the nation's minister for plantation industries and commodities said.
Production may reach 1 million metric tonnes as farmers boost tapping to benefit from higher prices, Bernard Dompok said in an email. Output last year was 856,189 tonnes.
Rubber futures traded in Japan have advanced 6.6 per cent this year after doubling in 2009, as production fell and the global economic recovery and government stimulus measures in China and US boosted demand for tyres.
The economic recovery "looks favourable for the natural rubber market to stay bullish amid a tight supply situation caused by a decline in regional production and a marked rebound in demand," Dompok wrote in reply to questions.
August-delivery futures, the most-active contract, fell as much as 1.4 per cent to 293.1 yen (Dh11.91) a kilogramme, ending a two-day, 4.5 per cent winning streak. The price earlier climbed to 297.9 yen, the highest level since March 2.
Exports of rubber and rubber compound may rise 6.2 per cent to 1.2 million tonnes, he said. The country shipped 1.13 million tonnes last year, including 430,000 tonnes of compound rubber sold mostly to China, Dompok said.
The government will maintain a minimum tappable plantation of 800,000 hectares and ensure that at least 25,000 hectares are replanted to meet the 1 million tonne output target, Dompok said. It aims to increase the average productivity to 1,800kg per hectare per year by 2020, from 1,450kg, he said.
Imports will increase 1.5 per cent to 750,000 tonnes this year to meet demand for compound rubber from China, and to supply domestic latex-goods manufacturers, he added.
