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IRSD serves food for thought

Dr. Hidde P. Smit, former Secretary General of International Rubber Study Group (IRSG) and globally renowned rubber market analyst, has provided enough food for thought for rubber planters across the world that could keep them worried for a long time to come. Speaking at the Indian Rubber Summit and Dinner 2014 (IRSD), organized by Rubber Asia, the most popular rubber industry magazine in Asia and sister publication of Polymers & Tyre Asia, Dr Smit warned that natural rubber price, which is at about USD1.77 in late 2014 could fall further and hit USD1.74 in 2015. He predicted that the fall could continue through the decade.

IRSD _Banner

IRSD _Banner

According to Dr Smit, this price fall is inevitable and there is the possibility of a glut of supply in the market as those planted in 2007 have only started yielding. The wise thing to do now to bring some stability in price would be to go for culling of trees and reduce tapping.

World NR consumption is expected to reach 18.6 million tonnes by 2025, while NR supply may exceed demand at 19.3 million tonnes by 2025 and 20.2 million tonnes by 2030, he said in his keynote address. He was addressing the summit, which was themed on “Rubber Industry: Taking on Challenging Times.”

Smit based his analysis on normal production levels using the vintage approach. The vintage approach derives and includes per country, the composition of the total area for natural rubber according to the year of planting (the vintages), the average yield profile for a hectare of rubber during its life and technical progress in quality of clones affecting yield profiles of hectares planted in various years.

His projection led to serious discussions at the IRSD, where global leaders from the rubber industry had gathered. While accepting the fact that prices will remain unstable, there were different takes on the issue by other experts who spoke at the summit.

(Full text in PTA October/November issue)


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