Rubber prices at 2-year low due to demand-supply mismatch

Rubber price has seen a sharp fall in the last month and is trading at two-year lows for a second straight day in the global markets. The fall has been attributed to concerns about a global recession, supply chain issues and China COVID restrictions. Along with this, there is a demand-supply mismatch.

Data from trade analysts shows that globally the annual production of rubber, this year, is expected to go up by four percent but the demand is not matching that.

While production has risen considerably in this fiscal after the COVID restrictions were lifted across the world, the demand rise has not been even half of that.

This has in turn led to production forecast downgrades in Japan, one of the most important rubber industries in the world. Earlier, similar downgrades were seen in Europe and China.