Kochi: The International Rubber Study Group (IRSG), an inter-governmental organization represented by various governments and the industry, will shift its headquarters from London to Singapore, signifying the growing importance of Asia in rubber trade, which is now also turning into a big consumption market.
Unlike other rubber producing countries, India has a domestic consumption of over 95% of its rubber production of around 8.5 lakh tonnes and is expected to have a significant role in the region. “The group is now moving close to the conventional production base with India and China emerging as important markets,” says Sajen Peter, chairman of India’s Rubber Board, the government body for trade and cultivation promotion, who heads the economic committee of the IRSG.
Asia is, in fact, the hub for rubber production with Thailand, Malaysia, Indonesia, India and Sri Lanka being major producers. According to Peter, Thailand and Spain were contenders, but it has been decided to shift the headquarters to Singapore. Thailand is the largest producer while Spain has huge rubber consumption.
IRSG expects global rubber consumption to outgrow supply by 2009. Recent estimates of the group suggest that by 2009, global rubber production will be 10.162 million tonnes (mt), while consumption will be higher at 10.363 mt.
Closer to hub: A worker shreds rubber tyres for scrap at a workshop in Mumbai. With India and China commanding a bigger share in the global rubber trade, the London-based group has decided to shift closer.
By 2020, global requirement of rubber is expected to be 13.8 mt while production will be around 13.28mt. The estimate has taken into account the planting boom in the last few years. This essentially means that steps will have to be initiated to raise productivity and extend the area of production.
The IRSG is a forum that keeps a close tab on the supply and demand of rubber and covers aspects of marketing, shipping, distribution and trade in raw materials as well as manufacture and sale of rubber products.
Taking into consideration the global demand-supply position, India is focusing on exports and extending its rubber production to the Northeast. It exported 56,488 tonnes, earning Rs510.27 crore during the fiscal year 2006-07.
The board estimates rubber production in 2009-10 to grow to 9.18 lakh tonnes from 8.74 lakh tonnes in 2007-08 and consumption to overtake supply by rising to 9.22 lakh tonnes from 8.53 lakh tonnes in 2007-08.
Kerala accounts for nearly 95% of India’s production. Yield from the rubber plants, planted in 1980s, has been on a decline and a massive replanting exercise is expected to begin this year. Prices have been rising since 2003 with natural rubber price now ruling around Rs90 a kg.
The board is taking steps to have dehumidified godowns that can help the farmer store rubber sheets for a longer period and extend rubber production to the Northeast in a big way.
Meanwhile, the board will participate in the Asean Rubber Conference in Cambodia supported by the Association of Natural Rubber Producing Countries (ANRPC), an inter-governmental organization formed to promote the overall interest of the natural rubber community, in June.