Natural rubber consumption seen up 9% globally on economic recovery

Kochi: Consumption of natural rubber is likely to increase by about 9% in 2010 with the global economy on the recovery path, officials of the Singapore-based International Rubber Study Group said.

In an alternate scenario, where global economies experience an extended recession, consumption would increase marginally, by about 1% to 9.64 million tonne from 9.54 million tonne in 2009, Stephen V Evans, secretary general of IRSG said here on Friday.

Production is likely to increase by 10% to touch 10.6 million tonne with higher prices promoting people to tap more, he added. The supply and demand situation will depend largely on the sustainability of the economic recovery, he said, adding that a lot of opportunity exists for refilling the pipeline.

High rubber prices are likely to lead to a second surge in planting rubber similar to 2005-08, when new areas in Africa, Laos, Cambodia and Vietnam took to rubber farming.

“Production from these regions, estimated to be around 1 million hectares, would be reaching the market from 2014- 2015,” said Lekshmi Nair, senior economist with IRSG. A similar move is being felt with China looking at planting six lakh hectares in Ivory Coats and Vietnam planting more rubber in Laos and Cambodia, she added. Even Guatemala is looking to plant rubber because of the high returns, she said.

Regarding demand, Evans said that the boom in automobile sector across the globe especially in countries like China and India augur well for natural rubber demand. But much depends on the government's stimulus packages, which were boosting auto sector across the globe.

According to Evans, climate change and its impact on rubber production had emerged as a serious concern because of the fall in production in most major rubber producing countries of late.

“As per a recent study, in Malaysia alone, climate vagaries have caused rubber yield to come down by at least 3 to 4 % and enhanced the gestation period of new rubber plants from seven years to seven and half years”, he said adding that this may be the general trend in all the rubber producing countries.

The rubber-growing region in China is facing a drought like situation, he pointed out. China is the leading consumer of natural rubber in the world. Weather conditions are also having an impact in Thailand, world's leading producer and exporter of rubber.

He said the task force constituted under the...

(financialexpress.com)