Kuala Lumpur – Production of natural rubber by member of the Association of Natural Rubber Producing Countries (ANRPC) fell 2.2% year-over-year in the first two months of 2017, according to the latest report by the association.

The drop, said ANRPC’s March report, was mainly caused by floods in south Thailand and an “unusual early onset of leaf-shedding off-season” across producing countries.

According to the report, the fall in supply has also coincided with a 3.3% rise in demand from within the ANRPC region, creating “favourable” supply and demand fundamental.

“While the demand-supply fundamental is likely to stay favourable during period from March to May 2017, prices can swing on either side in response to developments in crude oil sector, variations in currencies and flow of speculative funds,” said the report.

Also according to ANRPC figures, total NR production for the year 2017 is set to rise 4.2% this year, 0.2% higher than the figure announced earlier in the year.

The ANRPC said that supply is anticipated to rise in most of the countries in 2017 while Indonesia is expected to see a marginal fall.