9 April 2010 – The China State Reserve Bureau announced that it would sell 30,000 tonnes of natural rubber from state reserves on 14 April via open bidding.
The move by the Bureau is aimed at stabilizing rubber prices and to relieve the current supply pressure, both from lower domestic production and tight overseas supplies.
Continuous drought in southwestern China’s, Yunnan province, has affected 100 percent of its 167,000 hectares rubber plantation, which will possibly cause dry rubber output to decrease by 20,000 metric tons in 2010
Rainfall in Yunnan’s rubber growing area has dropped sharply since last October, with rainfall volume decreasing about 60 percent from previous years.
With the water shortage, the rubber producers were forced to put off field planting this year and taking other measures such as delaying start time for rubber tapping and reducing frequency of rubber tapping.
Yunnan is the second largest rubber producing region in China, next to Hainan, with production reaching 302,000 tonnes in 2009.
The current dry spell in major rubber producing regions in Southeast Asia, especially in Thailand and Malaysia, is not only pushing prices to new heights but also causing supply tightness.
China had bought 105,000 tonnes of natural rubber from the domestic market last year for its state reserves in a move to protect farmers’ interests and regulate supply.
IRCo
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