Sunday, December 03, 2006

Natural Rubber

China and Japan are really very successfully outcompeting U.S. interests in the acquisition of this strategic commodity, and the demand is increasing, yet (effective, sustainable) production is declining everywhere... because it is a labor intensive crop. The rubber industry in Sumatra was somewhat disrupted by the tsunami, but faces long term problems due to demaged and degraded infrastructure. Rubber production in the Thai Malay-speaking areas may continue to be effected by conflict. Ambitious planting schemes are announced by economic planners in China, Thailand and other places, but experience shows smallholder systems with village scale cooperatives doing basic processing to create export grades of bulk natural rubber are most likely to supply the world's growing demand for natural rubber. Plantation scale systems favor less labor intensive crops, like oil palm or row crops (soybeans/corn) and very specific crops for pharmaceutical phytochemicals like you see in Brazil...

Here is an article on the growing demand:

China's natural rubber import surges by 18.4 per cent

Beijing, Dec 4. (PTI): China, the world's largest consumer of natural rubber, imported 1.32 million tonnes of the material in the first ten months, up 18.4 per cent year on year, latest customs figures showed.

The import during January-October was worth $2.52 billion, up 79.1 per cent.

Foreign-funded companies in China bought 43.3 per cent of the import nearing about 5,70,000 tonnes, while state-owned enterprises imported 3,98,000 tonnes and private firms took 2,86,000 tonnes, figures from the General Administration of Customs showed.

About 88.6 per cent of Chinese imports come from Thailand, Malaysia and Indonesia. The three countries account for 70 per cent of the world's natural rubber production.

China, which consumes one-fifth of the world's total natural rubber production, will consume 1.5 million tonnes of it in 2006, the China Rubber Industry Association predicted. [The Hindu]

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