Tokyo rubber futures rise

Tokyo rubber futures rise
WEDNESDAY, MAY 18, 2011

Tokyo (may 18, 2011) : key tokyo rubber futures rose 3 percent on tuesday, supported by a weaker yen and strength in the shanghai rubber futures market. the benchmark tocom rubber futures for october delivery settled up 11 yen or 3 percent at 381.4 yen per kg. the benchmark settled slightly above its 200-moving average, which stood around 379 yen on tuesday, suggesting the bearish technical outlook may be changing, traders said.
the most active shanghai rubber futures contract for september delivery closed up 365 yuan or 1.2 percent at 31,570 yuan ($4,850.415) per tonne on tuesday. volume stood at 1.4 million lots. brent oil hovered near $111 a barrel on tuesday as investors tread cautiously given debt issues in the eurozone and ahead of weekly us data expected to show builds in us crude and gasoline stocks.
the euro held steady against the dollar on tuesday, pulling away from a seven-week low hit the previous day, but downside risks persisted after its recent breach of a technical support level and due to the lingering threat of further long liquidation. the yen fell broadly, with the dollar rising 0.6 percent to 81.30 yen. rubber in asia changed hands at below $5 a kg for nearby delivery, with buying interest coming from major tyre makers, but main consumer china was elusive because of high inventories in bonded warehouses, dealers said on monday.




Vietnam may beat india in rubber output
WEDNESDAY, MAY 18, 2011

KOCHI: Troubled by a stagnating trend in production, India may soon lose its position as the fourth-largest producer of rubber in the world.
Vietnam, which has seen a fast growth in acreage under rubber in the recent years, may dislodge India from the fourth slot. The fifth-largest producer of rubber, Vietnam's total planted area saw a cumulative increase of 3,78,700 hectares between 2003 and 2010.
Taking into account this growth, the rubber industry experts say that Vietnam "will soon be ahead of India" in rubber production. We expect this to happen in 2012," said Vinod T Simon , president of All India Rubber Industries Association .
But the cumulative growth in total planted area achieved by India is 2,30,200 hectares during the same period. Industry's concern stems from the fact that rubber production in India has not seen any major increase in the last 4-5 years.
India's production stood at 8.53 lakh tonne in 2006. Though the production increased slightly to 8.81 lakh tonne in 2008, it declined in the subsequent years. In 2010 the production stood at 8.51 lakh tonne. Compared to this, the production in Vietnam has seen a steady increase from 5.55 lakh tonne in 2006 to 6.60 lakh tonne in 2008. It stood at 7.55 lakh tonne in 2010.
India's projected output for 2011 is 9.02 lakh tonne while that of Vietnam is 7.8 lakh tonne.
A official of the Rubber Board said that Vietnam might take a few more years to emerge as a bigger rubber producer.




Rising rubber costs inflate tyre prices
WEDNESDAY, MAY 18, 2011

The cost of running a car is about to rise again with tyre manufacturer Bridgestone New Zealand increasing its prices for car tyres by up to 16 per cent.
Bridgestone says car tyres sold under its own brand and the Firestone brand will increase by up to 9 per cent, while other associate branded tyres will be by as much as 16 per cent next month.
Commercial vehicle tyres, tubes and retreaded tyre prices will increase by up to 5 per cent from July 1.
Bridgestone New Zealand business director Ken Oyama blamed the increases, the second round of rises this year, on the price raw materials remaining at historically high levels.
Further price rises would be necessary if those costs did not reduce.
The price of natural rubber has continued to increase at an unprecedented rate, Mr Oyama said.
In addition the price of petrochemical-based materials like synthetic rubber and carbon black remain high.




LN: Czechs cultivate plant that may replace rubber trees
WEDNESDAY, MAY 18, 2011

Prague, May 17 (CTK) - Czech botanists have cultivated a new plant, a hybrid of "kok-saghyz" from Kazakhstan and other Asian dandelions, that can potentially replace dying rubber trees afflicted by mould, the daily Lidove noviny (LN) reports Tuesday.
The new dandelion, cultivated at the Botanical Institute of the Czech Academy of Sciences (AV), is bigger and has a stronger root than the original kok-saghyz, and consequently it would give more rubber, LN writes.
Czech botanists have thereby taken the first step to avert a worldwide collapse over the lack of rubber, which is necessary in many fields, such as road traffic (tyres), hockey (pucks), medicine (surgical gloves) and birth control (condoms), the paper adds.
Natural rubber is applied to the same extent as the synthetic one. However, the rubber tree plantations in Latin America are threatened with extinction as the para rubber trees (Hevea brasiliensis) are hit by the Microcyclus ulei fungiform disease that is spreading quickly. It has not yet afflicted the rubber tree plantations in Asia, but the risk is high, LN writes.
This is why an alternative plant to replace the rubber tree should be prepared as a reserve.
The demand for rubber has been rising mainly in the expanding economies of China and India. These countries used to produce rubber, but now they have to import it. The rubber prices are increasing, too, LN notes.
Moreover, the current way of rubber harvesting is dependent on a cheap and available workforce, while computer-controlled machines could be used for the alternative new plant, LN says.
In reaction to the above-mentioned risks, a European project was launched with the participation of the Czech Republic, France, Germany, Kazakhstan, the Netherlands, Spain, Switzerland as well as the United States.
Czech botanists were invited to the project as they had been mapping the area with a variety of dandelions in Asia for over ten years, team head Jan Kirschner, from the AV's Botanical Institute, told the paper.
Czech botanists were asked to cultivate a new form of dandelion that would grow fast, be sufficiently big, and thus contain a lot of rubber, and reproduce easily.
"It was extremely difficult to cross kok-saghyz with other dandelion species to achieve the required qualities," Kirschner told LN.
Colleagues from Germany and the Netherlands will now be finding out whether the new plant contains enough rubber, he added.
The new dandelion form does not need pollinating for reproduction, it is resistant to drought and soils with a high salt content. This is why it could be grown in south Europe, for instance, on abandoned fields in Spain, the paper says.
Another group of the international team is developing a combine harvester for the new plant that would catch rubber from the roots in a reservoir, while leaves and stalks would be used as fodder, LN writes.
Moreover, in adds, the plants could give inulin, a polysaccharide that can be used in foodstuffs in the form of a fine white sweet low-caloric powder. According to some experts, the new dandelion might be primarily the source of inulin, while rubber would be a by-product.
The first dandelion plantations should appear after 2012 when the European project is to be completed, LN writes.
The paper also reminds of the history of kok-saghyz that botanists first uncovered in Kazakhstan in 1931. The Soviet leader Joseph Stalin ordered to grow it en masse as a source of natural rubber.
Before World War Two, Adolf Hitler was interested in it at the time when the Soviet Union supported Nazi Germany with strategic raw materials. The plant was then experimentally grown in Germany and Austria.
After Germany invaded the Soviet Union in 1941, Germans tried to grow kok-saghyz in Ukraine but they were not very successful. The Soviet Union then gave the plant's seeds to its allies. Experiments with the plant started to be carried out in the United States.
After the war when rubber export from southeast Asia was revived, kok-saghyz's importance declined and it was almost forgotten after Stalin's death in 1953. Since then kok-saghyz has appeared outside Kazakhstan only in collections of botanical gardens and seed banks, LN recalls.




Tyre Markets Continue To Grow In April
WEDNESDAY, MAY 18, 2011

Pirelli has updated its website with tyre sales for the month of April and the first four months of 2011. Japan and other countries saw significant declines in April, almost certainly due to the effects of the 11 March earthquake and tsunami.
The company reports truck tyre sales still growing around the world, but sales of car tyres easing. The company reports only percentage changes, not absolute numbers.
Pirelli said European truck tyre replacement sales increased by 16 percent in the first four months, but the April figure was up by 13 percent compared with a year ago. European OE figures slowed sharply, showing an increase of 69 percent in the year to date but just 16 percent in April, down from 70 percent growth the previous month.
OE truck tyre sales in the NAFTA region also slowed significantly, increasing by 59 percent in the year to date, but just 17 percent in the most recent month, compared with 61 percent growth in March. On the replacement side sales also slowed, with an increase iof 17 percent in the first four months but just 2 percent in April. Sales data for the Mercosur region was not available. Neither was the China data
Replacement sales in Japan showed 20 percent growth over the first four months of 2011 though the replacement figure was up by 15 percent in the month of April, showing a significant post-tsunami recovery from the 18 percent decline seen last month..
In the car and light truck segment, sales were significantly less healthy. European OE sales were up by 8 percent for the first four months, but moved into negative territory, with a 2 percent decline in the month of April. Replacement sales were up by 5 percent in the year to date but down by 3 percent in April.
North American (NAFTA) sales of car and light truck tyres grew, but also at a slower rate. On the replacement side, sales in the four months were up by 4 percent, despite a decline of 3 percent in April. On the OE side, the first four months saw growth of 13 percent, while April sales increased by just 2 percent. In the Mercosur region, OE sales were up by 8 percent in the first four months with an increase of 6 percent in the month of April. Replacement sales were weaker, down by 3 percent in the year so far and down by 6 percent in the month of April.
Sales data from China were not yet available and will be updated in the coming days. Japanese sales of replacement tyres fell by 2 percent in the first four months and fell by 8 percent in the month of April, as the impact of the 11 March earthquake took hold.
(European Rubber Journal, May 17, 2011)




Poor Rubber production rings alarm bells in consumer circles
WEDNESDAY, MAY 18, 2011

KOCHI (Commodity Online): Rubber production is now officially a matter of concern in India. Despite the high prices, production has not touched where it should have been mainly because of the unpredictable weather in rubber producing regions and a huge slump of prices post Japan quake.
Despite being the fourth largest producer of rubber, India still faces a huge shortage of rubber in for domestic consumption. With the rising global rubber prices Indian tyre and non-tyre industry have posed a great concern for the rubber imports for meeting the deficit due to low level of domestic rubber production. Rubber production in India has not seen any major increase in the last 4-5 years. The cumulative growth in the total rubber-plantation area has been significantly low further aggravating the problems of shortage of rubber in the domestic market.
The tyre companies heavily depend on the rubber imports. They form a large share of the total rubber demand. The rising rubber prices will result in an increase in the auto tyres prices. With the decrease in the production of natural rubber the imports are heavily exceeding exports which further increase the pressure on the domestic rubber industry.
Taxes on the import of natural rubber is as high as 20% and increasing global prices has created an alarm among the tyre manufacturing companies in India. The Rubber Board has expressed hope for the increase in the natural rubber production. However, it would still not be sufficient to meet the domestic demand.




Stretching the options for rubber
THURSDAY, MAY 19, 2011

Given the exploding demand from tyre makers and shrinking availability of land, it makes sense to look abroad for tracts to grow rubber on.
The rubber industry and tyre manufacturers are stretching out in a different direction. Moving away from their usual demand for duty free imports, they are asking the Government to replicate China's experiment of acquiring land abroad to grow natural rubber and meet rising domestic demand in the Twelfth Plan. India's natural rubber consumption last year was 0.94 million tonnes, against production of 0.85 million tonnes. The demand-supply gap can only be expected to widen. The data on new plantations and replanting would seem to support the rubber industry's argument. Replanting has taken a hit with rubber prices ruling over Rs 150 a kg since March last year, as growers did not want to replace old trees that were still giving them returns aplenty. New planting, particularly in non-traditional areas, is not yielding the desired results, with productivity being lower than expected. The traditional areas of Kerala have reached a saturation point, with ever increasing demand for land for other purposes, such as realty, tourism and other plantation crops. In such circumstances, the best option seems to be look abroad.
China has begun acquiring rubber plantations in countries such as Laos, Cambodia, Ethiopia and Vietnam. It is attempting to build a strategic reserve in rubber, just as it has done for crude oil. This is aimed at giving it a controlling interest in natural rubber. It need not be at the mercy of one country or another to get the required supply of the commodity. India's rubber industries and tyre manufacturers would like the Centre to emulate China's approach.
India can use its credibility and good offices to acquire land in Africa or in the East Asian countries. On the other hand, it will also pose a new challenge to the Rubber Board to replicate its success at home. It should be remembered that the success stories around corporates acquiring land in Africa or East Asia to grow flowers, vegetables or oilseeds may not extend naturally to rubber. Flowers, vegetables and oilseeds provide quick returns on investments, whereas it takes seven years for a new rubber plantation to begin yielding. Therefore, some sort of bilateral investment protection pact between India and the country where lands are to be acquired will provide some security. Such a long-term view is the need of the hour, given the fact that land availability in the country is shrinking fast and the explosion of growth in automobiles puts the tyre manufacturers in an unenviable position.