RubberMove 2024: Natural rubber industry ‘must tap new opportunities’

Davao, The Philippines – The global natural rubber industry faces significant challenges, including supply-demand imbalances, price volatility, and regulatory pressures, according to a report on the recent RubberMove 2024 international rubber conference in the Philippines.

However, there are also ample opportunities for growth through productivity enhancements, market diversification, and sustainability initiatives, said the report issued by organisers Xida Communications and the Philippines Rubber Industries Association.

By leveraging innovation and adopting sustainable practices, the rubber industry can address these challenges and capitalize on emerging opportunities, delegates to the event held 26-28 Sept in Davao also heard.

Data presented during the conference, showed that, despite substantial fluctuations, global production of natural rubber only a modest annual growth rate of 1.55% 2015 between and 2023.

Over the same period, global consumption of natural rubber has grown at an annual rate of 1.62% from 2015 to 2023, with demand driven by the automotive industry, particularly for tire manufacturing.

Key producers of the commodity in 2023 included: Thailand, 5,211kt; Indonesia, 1,948kt; Vietnam, 1,339kt; India: 849kt; and China, 780kt.

Several NR growing countries have experienced declines in production due to various factors such as aging plantations, diseases, and adverse weather conditions, the conference heard.

The largest NR consumer is China where demand reached 6,102kt in 2023, followed by: India, 1,408kt; the EU27+UK, 1,085kt; Thailand, 948kt; and the US, 831kt.

According to the report, the consumption patterns have been affected by economic slowdowns and disruptions in global supply chains.

Natural rubber prices, it went on to note, “have been volatile over the past decade, influenced by global economic conditions, supply chain disruptions, and changes in production levels.”

Average annual prices ranged from around $137 to $170 per kg – one analysis put the range at $105 to $243 – over the past 10 years and currently sit at around $167/kg (year-to-date, August).

NR prices could increase significantly due to the projected shortage in supply and increasing demand – particularly if production remains stagnant creating a supply-demand imbalance.

Indeed, according to the report, the projected deficit by 2030 could reach 1,648kt without a substantial pick-up in output from NR producing countries.

“Many producing countries, including the Philippines, have low productivity rates compared to leading producers like Vietnam,” it noted, while also highlighting issues around deforestation and loss of biodiversity.

 On the positive side, the review saw opportunities for productivity enhancement: increasing yields through better farming practices and replanting programmes.

A further upside identified was the potential for developing new markets as well as for increasing domestic consumption in producing countries.

Meanwhile, increasing implementation of sustainable farming practices could improve returns for smallholders, as could the adoption of technologies that enhance productivity and reduce environmental impact.