Rubber prices are expected to grow 4.1 per cent next year as natural rubber has a tendency to react faster to international economic developments, Dr John Baffes, a World Bank economist, said. Global market is expected to grow 5.3 per cent next year. Natural rubber is a complex product. It is dependent on a lot of factors other than economic and commerce. Climate change and diseases can affect rubber prices. Decisions by lakhs of small growers can also affect the market, said Baffes, senior economist at the World Bank Development Prospects Group. Rubber is the most susceptible to crude oil price volatility, Baffes said, talking at the India Rubber Meet in Kochi. Market prices of most products have been sliding. The slide that started in the middle of the previous year is still continuing. Crude oil has come down from $108 per barrel in last June to $50 in January due to higher production from shale fields in the United States. Even agricultural products market fell by 6 per cent since June. Demand for crude oil has come down even in high-income countries due to the long shadows of the global economic downturn. The rise of the U.S. dollar since July last year also contributed to the price fall. Though OPEC countries limited oil production to 30 million barrels per day, many countries are prepared to sell crude at lower prices. Crude price is expected to remain at $53 per barrel on average this year, a decrease of 45 per cent from last year. This will also affect natural gas prices, which are expected to fall by 15 per cent to 30 per cent.

Source: ManoramaOnline