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Rubber: Drawing Lessons from History—An Initial Exploration of the Relationship Between Domestic Stockpiling and Destocking and the Supply-Demand Structure

Release Date:

2023-12-01

Thailand: Whenever news of a government stock‑piling proposal is released, it typically pushes spot prices higher for the week; however, as the government’s credibility has eroded, the impact of such announcements on market prices has grown increasingly muted in recent instances. With the exception of 2017, when flooding in major producing regions drove prices up, government sales have generally exerted downward pressure on weekly spot prices.

Thailand: Whenever news of a government stock‑piling proposal is released, it typically pushes spot prices higher for the week; however, as the government’s credibility has eroded, the impact of such announcements on market prices has grown increasingly muted in recent rounds. With the exception of 2017, when flooding in major producing regions drove prices up, government sales have generally weighed on spot prices during the same period.

China: Except for the price volatility in 2007 and 2013 caused by supply‑demand imbalances, news of a state‑purchase program may push domestic prices higher within the month, or it may have little impact; conversely, a state‑sale program typically exerts downward pressure on prices during the same period.

Overall, the domestic market remains in a state of oversupply, and the 2023 supply‑demand gap is expected to closely resemble that of 2012. Accordingly, the estimated volume of rubber stockpiling this time is around 100,000 tonnes, and it will consist entirely of fresh latex. Given that the period from 2003 to 2012 witnessed a rapid expansion in domestic rubber‑planting acreage, the turning point for domestic supply may not arrive until 2028.

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