Weather Influencing Rubber Price Factors

- Dec 19, 2018-

To be precise, the weather factor that affects the price of natural rubber refers to the weather in the rubber producing area.I believe those who know about natural rubber are no strangers. Rubber trees are now widely planted in Indonesia, Thailand, Malaysia, India, Vietnam, Sri Lanka, south China and other southeast Asia and South Asia tropical regions.Rubber trees or high temperature, high humidity, and fertile soil, no wind and gum trees in the surrounding temperature of 5 ℃ below is cold, so their growth environment require the annual average temperature is 26 ~ 27 ℃, annual average rainfall of 1150 ~ 2500 mm, but the rubber during 20 ~ 30 ℃ scope can normal growth and glue, but unfavorable to plant in low humidity of the place.It is suitable for the growth of acid sandy loam with deep soil layer, rich and moist soil and good drainage.Shallow root, weak branches, poor adaptability to wind, susceptible to cold and reduce gum production.

It is not hard to see the places suitable for rubber trees mentioned above. Most of them are in tropical rainforest climate, with high temperature and rainy all year round and no obvious seasonal difference.And the activity must be in no wind, no rain under the normal environment.Once these bad weather, then the glue can not be produced normally, rubber base supply direction will be affected.In other words, when we see extreme weather in Thailand, Malaysia, Indonesia and other countries, the price of rubber will fluctuate upward to a certain extent. Long-term extreme weather may make the price of natural rubber fluctuate for a long time.The most intuitive effect is the contradiction between supply and demand. If the raw material supply is affected by the weather, there will be a shortage, and then the price will increase accordingly.

Of course, there is also a certain degree of market sentiment influence. When considering fundamentals, some investors in futures market will make investment choices by referring to the recent weather conditions in the rubber producing area. The occurrence of bad weather may lead to a decrease in supply, and the market may be prone to excessive sentiment.

Simply put, when the production area is not cut gum bad weather, gum prices may rise.Of course, combined with the current slow pace of natural rubber inventory digestion, the emergence of extreme weather is likely to make the rebound is not particularly large, unless there is continued bad weather for a long time.However, from the perspective of the rubber farmers, this situation may not be acceptable to everyone.