Rubber output set to record growth after 3 years

Rubber output set to record growth after 3 years
Global production pegged at 9.3 million tonnes on rising acreage.

Global rubber production is expected to perk up to 9.369 million tonnes this year on rising acreages in key producer nations.


Kochi, June 2After three tears of stagnation and decline, global rubber production is poised to grow by six per cent this year.

The Association of Natural Rubber Producing Countries (ANRPC), which accounts for 94 per cent of global rubber production, said the output growth which was a meagre 0.2 per cent in 2007, virtually stagnated in the following year before posting a decline of 3.6 per cent in 2009.

Global rubber production is expected to perk up to 9.369 million tonnes (mt) this year.

The current tightness being felt in global markets is the carry over impact of stagnant and falling production over the last three years.

Based on historical global planting trends and age structure of trees, the association had predicted that global rubber production trends are likely to remain stagnant till 2011.

Acreage rises

The prime reason why an increase can be expected this year is because the yielding area under rubber in some of the major producing countries is poised to grow.

According to the revised estimates available in mid-May, yielding area under rubber has expanded by 10,000 hectares in Cambodia, by 22,000 hectares in China, 9,000 hectares in India and 23,000 hectares in Vietnam.

In response to the surging price line farmers are also reviving tapping along un-harvested areas.

A section of the small holders in Malaysia and Indonesia is expected to have revived taping in 85,000 hectares and 64,000 hectares, respectively. Another 85,000 hectares planted in Thailand in 2003 are expected to attain maturity and begin to yield from this year onwards.

However, given the slippages in the past few years, the average annual growth rate during 2007-10 would still remain subdued at 0.8 per cent only.

Revival in production

Initial production indicators of the first few month of the current year point to a revival in production in major producing countries.

Production is expected to have increased by over 35 per cent in January-April 2010 in both Cambodia and Malaysia. Production is expected to have grown by close to 25 per cent in Thailand and Vietnam.

India's production is expected to have grown by 8.5 per cent during Jan-April period.

Consumption up

On the flip side, increased demand and consumption by countries such as China, Malaysia and India is expected to sustain the buoyancy in global rubber prices.

Consumption of natural rubber rose by 25 per cent in China, 11.7 per cent in India and 13.6 per cent in Malaysia during the first four months of current year.

The trend in the three major consuming countries in the association supports the view that demand for natural rubber remains strong despite woes and worries clouding expectation of global economic recovery.



Physical rubber weak as futures slide

Kottayam, June 2

Physical rubber prices weakened on Wednesday. The market reacted in tune with the sharp declines in Japanese futures but recovered marginally as Tokyo Commodity Exchange (TOCOM) finished slightly better on late trades. Sheet rubber which was traded even at a low of Rs 166 a kg on early trades finished at Rs 167 (169) a kg on covering purchases at closing hours. The trend continued to be mixed.

The June futures for RSS 4 closed at Rs 166.94 (165.35), July at Rs 163.70 (162.65), August at Rs 157.99 (156.78) and September at Rs 154.45 (153.47) a kg on National Multi Commodity Exchange. RSS 3 declined sharply at its June futures to ¥366 (¥379.9), July to ¥351.3 (¥364.7), August to ¥323.9 (¥340.2), September to ¥296.8 (¥310.8), October to ¥272.4 (¥285.6) and November to ¥269.2 (282.2) a kg during the day session on TOCOM. The June futures recovered partially to ¥369.5 (Rs 188.62), July to ¥355, August to ¥326.6, September to ¥298.7, October to ¥275.1 and November to ¥271 a kg on late trades.

RSS 3 (spot) nose dived to Rs 176.63 (180.85) a kg at Bangkok. Spot rubber rates in Rs/kg: RSS-4:167 (169); RSS-5:164 (167); Ungraded:161 (165); ISNR 20:152 (152) and Latex 60 per cent: 111 (111).



Continue import duty on natural rubber: growers

Staff Reporter
KOCHI: The Indian Rubber Growers' Association has appealed to Prime Minister Manmohan Singh that 20 per cent import duty on natural rubber should be continued and that the import duty on used tyres should be raised to 20 per cent.

The association, in a memorandum to the Prime Minister on Monday, requested that import duty on cycle tyres be increased, an initiative be launched to develop rubber cultivation in the North East of the country, a welfare fund be established for rubber tappers and no ban be imposed on futures trading in natural rubber.

Association general secretary and Rubber Board member Siby Monippally said in the memorandum that natural rubber played a key role in Kerala's economy and the crop contributed substantially to the State's economy.

Hard work

The memorandum said Kerala produced more than 92 per cent of the natural rubber in the country. “This has been achieved over the past 50 years by the hard work of small rubber growers of Kerala,” the memorandum said.

The small growers, owning below one hectare, contributed about 90 per cent of the total rubber production in India.

Culivatiotion

Rubber cultivation was picking up in the States of Assam, Tripura and Meghalaya. North Eastern States had the potential to bring about 4.5 lakh hectares under rubber.

The memorandum lauded the role played by the Rubber Board and said that professionalism introduced at the primary and apex level had strengthened the cooperatives to deal directly with the market worldwide.

It said the introduction of futures market had helped establish an “efficient, transparent parallel mechanism” for all stakeholders.

Export of tyres had grown and annual results of tyre companies pointed to a healthy industry, the memorandum said.(The HINDU)


Malaysia to Double NR Production by 2020
Posted: 01 Jun 2010 11:29 PM PDT

By Anant Thawatchaipracha

1 June 2010 - Malaysia plans to double its natural rubber production to 1.8 million tonnes in 2020, said Tan Sri Bernard Giluk Dompok, the Malaysian Minister of Plantation Industries and Commodities, when he launched the Strategies for the Malaysian Rubber Industry and the Malaysian Rubber Board for 2010-2020 in Kuala Lumpur on Tuesday 18 May 2020.

Malaysia produced 846,900 tonnes of natural rubber in 2009 and expected production in 2010 to increase by 5.9% to 900,000 tonnes.

To meet the production target the plan strategies to increase productivity by 1.8 tonnes per hectare per year by 2020, from the current level of about 1.4 tonnes per hectare per year and also expansion of hectarage to 1.2 million hectares with a tappable area of 1 million hectares, from the current hectarage of 1 million hectares with a tappable area of about 0.7 million hectares.

The plan also envisage increasing rubber replanting to 40,000 hectares yearly from the current 20,000 hectares, expanding existing rubber plantations and opening new rubber areas, especially in the states of Sarawak and Sabah on the island of Borneo and also converting idle lands into rubber plantations.

It also include increasing and maintaining tapping to 26 days a month and raising the number of trees per hectare to 550 from the current 350-400 trees per hectare.

The Minister also said that the Malaysian downstream rubber industry must venture into new sources of growth as the current model was too narrow based, with almost 80 % of exports consisting of latex dipped rubber goods.

Malaysia, he said, have the technological advantage and therefore the potential to become a leading hub for rubber technologies and rubber product manufacturing.

(Irco.biz)





Rubber Drops as Demand May Weaken After China Car Sales Slow
Posted: 01 Jun 2010 09:59 PM PDT
By Aya Takada

June 2 (Bloomberg) -- Rubber declined for a second day as a slowdown in China’s car sales stoked concern that demand may drop from the biggest consumer of the commodity used in tires.

Futures in Tokyo lost as much as 2.8 percent to the lowest level since May 27 also after data showed yesterday manufacturing growth in China and the euro region weakened in May, stoking speculation the economic rebound may be slowing.

China’s passenger-car sales growth slowed last month as falling stock prices eroded wealth and consumer prices rose in the world’s largest automobile market. The Shanghai Composite Index fell 9.7 percent in May as Chinese stocks remained among Asia’s worst performers this year.

“The market is weighed down by concern about the global economic recovery as data from China showed a slowdown in growth,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today by phone. “Rubber may extend losses in tandem with other industrial materials.”

Rubber for November delivery, the most-active contract, fell as much as 7.8 yen to 274.4 yen per kilogram ($2,994 a metric ton) before trading at 277.3 yen on the Tokyo Commodity Exchange at 11:33 a.m.

China’s sales of cars, sport-utility vehicles and multipurpose vehicles rose 25 percent from a year earlier to 885,800 last month, the China Automotive Technology & Research Center said yesterday. That compares with 34 percent growth in April, according to the center. The data came out after the Tokyo exchange closed yesterday.

‘Diminishing Wealth’

A “diminishing wealth effect” from Chinese stocks, along with high gasoline prices, may contribute to a slowdown in auto sales, Credit Suisse Group AG analysts Adrian Chan and Hung Bin Toh wrote in a report last week. Vehicle sales could decline from year-earlier levels in the second half of 2010, they said.

Losses in rubber futures were limited as the yen dropped after Prime Minister Yukio Hatoyama told lawmakers he would resign, damping the allure of the currency as a haven. A weaker Japanese currency raises the appeal of yen-based contracts for the commodity traded globally in dollars.

The yen slid to 91.63 per dollar from 90.94 yesterday in New York. Ichiro Ozawa, the ruling party’s No. 2 official, will also step down, Hatoyama said today.

September-delivery rubber on the Shanghai Futures Exchange lost 1.6 percent to 22,210 yuan ($3,252) a ton.

(bloomberg.com)





Rubber Futures in Tokyo Drop 2% to 276.6 Yen/Kg
Posted: 01 Jun 2010 09:56 PM PDT
By Aya Takada
June 2 (Bloomberg) -- Rubber futures in Tokyo declined as much as 2 percent today after crude oil slumped.
The November-delivery contract dropped to 276.6 yen a kilogram at 9 a.m.
(bloomberg.com)





Raise import duty on used tyres, urges rubber association
Posted: 01 Jun 2010 09:53 PM PDT
The Indian Rubber Growers Association (IRGA) has urged the Central government to enhance the import duty on used tyres to 20 per cent, at par with the import duty on natural rubber (NR). Currently the duty is 10 per cent.
The association, in a memorandum to the Union minister for commerce, also demanded that the present import duty on NR should be maintained. Futures trading in rubber should not be banned and in order to bail out the struggling small and medium rubber-based units, import duty on cycle tyres must be raised.
Sibi J Monippally, general secretary, IRGA said export of tyres from India had shown a growth of 30 per cent this year. Annual results of all tyre companies disclose an overall growth of 25 per cent in their profits during the last financial year. He cited the example of Apollo Tyres, whose net profit increased to Rs 653 crore.
A major chunk of NR imports (152,000 tonnes) during the last financial year were made without the duty, through the advance license route.
Used tyre imports from China have increased during these years, adversely affecting domestic the tyre industry. The additional import of 45,000 tonnes of used tyre has also adversely affected rubber growers.
There is no rationale in the consuming industry’s demand to reduce import duty of NR and ban futures trading, he said.
Kerala produces 92 per cent of the total 900,000 tonnes of rubber produced in India. Moreover, 1 million people are directly involved in rubber farming and about 6 million people are indirectly associated with this business.
The association pointed out that there is no imbalance in the production and consumption of rubber in India as cited by the rubber-based industries recently.
Kerala’s economy actually revolves around rubber industry. It is the spiralling rubber price which has significantly contributed to the recent 10 per cent overall growth of Kerala’s economy, the memorandum adds.
(sify.com)