Titan International said it was looking for a near-40% drop in rubber prices by the end of the year as it bucked the trend among machinery groups by unveiling record first-quarter sales to farmers.

The group, noting that the costs of all its raw materials bar nylon were dropping, cited projections of a fall to $0.50 a pound in the price of natural rubber, from about $0.80 today. The price reached $1.52 a pound last September.

The comments echo those of other tyremakers such as Bridgestone, the global leader, which said in February that lower costs of rubber and other raw materials would add roughly $1bn to this year's earnings.

However, Thailand, Indonesia and Malaysia, which account for 70% of global rubber production, have threatened to enter futures markets to prop up tumbling prices.

Farm uncertainty

Titan said that large farm tyres and wheels had sold well in the first quarter, driving agriculture sales 7.9% higher to $187.3m.

However, a 45% fall in sales at the group's smaller mining business capped group revenues at $232.6m, down 9.3%. Earnings dropped 13.4% to $7.04m.

Maurice Taylor, the Titan chairman and chief executive, said that while second quarter sales had been good so far, prospects further ahead were "difficult to predict".

"The price of corn is holding and soybeans are up, so the agricultural market looks good," he said.

"But are farmers going to keep buying with all the uncertainty in the economy? I don't know."

Titan shares stood $0.25, or 4.1%, higher at $6.39 in early deals in New York.