Compound rubber shipments to China have surged this year due to a zero tariff on imports from several major producers in Southeast Asia, a senior International Rubber Study Group executive said Tuesday.
Trade and industry officials said this has compelled international bodies to change their data collating procedures to reflect China's appetite for compound grades in the overall demand and supply estimates. Compound grades have a natural rubber content of around 97%.
To get a clearer picture of the natural rubber trade, compound rubber data will also be taken into account, said Jom Jacob, senior economist with Association of Natural Rubber Producing Countries. ANRPC has asked member countries to start providing relevant data.
Analysts said the sharp rise in China's compound rubber imports has resulted in a greater need to account for these volumes to arrive at credible natural rubber estimates.
"We are taking into account imports by China under two major custom categories -- HS-400599 and HS-400591, to compile figures for natural rubber," said the IRSG executive, who didn't want to be named.
According to estimates by Singapore-based IRSG, natural rubber content in China's compound rubber imports during the January-October period was around 742,000 metric tons compared with 364,000 tons during the whole of 2008.
IRSG data don't account for imports under two other categories -- HS-400520, which is in liquid form, and HS-400510, comprising around 55% synthetic rubber.
China's compound rubber imports will likely reach 950,000 tons this year, from about 557,000 tons in 2008, Mo YeYong, associate professor at China's Danzhou-based Rubber Research Institute, told Dow Jones Newswires last month.
Under a free trade agreement with the Association of South East Asian Countries, compound rubber imports by China enjoy zero tariff.
For major rubber growers such as Indonesia, Thailand and Malaysia, the zero tariff has been implemented while it is 5% for other Asean nations. The tariff on natural rubber imports is 20%.
Many exporters blend natural rubber with a small amount of synthetic grade to qualify for China's lower tariffs.
Due to such blending, arriving at accurate natural rubber statistics is becoming difficult in countries such as Malaysia; export figures for natural rubber aren't in line with production data.
September output was estimated at 77,203 tons, down 27% on year, but exports were put at only 47,291 tons, down 43%, even though the bulk of the production is exported.
The gap is due to exports in compound form, a senior Malaysian government official said.
Another industry official said the restriction on natural rubber exports earlier this year by the International Rubber Consortium, to shore up prices, also led to greater compound rubber shipments.
Malaysia will now separately provide figures on compound rubber exports. It has also extended a research and development tax of 4.0 sen per kilogram on exports of compound rubber made from imported natural rubber. The tax was earlier applicable only to locally produced natural rubber.
(Source: irco.biz)
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