RECENT HISTORY (POST 1979)

Price Stabilization

The International Natural Rubber Agreement was brought into being by the United Nations Commission for Trade and Development (UNCTAD) in 1979. Its primary aim was to stabilize natural rubber prices and to achieve a steady growth in natural rubber revenues. A provisional Agreement came into force in 1980 and the associated International Natural Rubber Organization (INRO) came into being in 1980. This agreement was unlike the earlier price stabilization measures in that the major consumers were involved. The Agreement was terminated in September 1999 and arrangements have since been made to dispose of the buffer stock in an orderly manner and to transfer the functions relating to research activity, and future price protection measures, to the International Rubber Study Group. Malaysia had announced its withdrawal from the Agreement in October 1998 as its response to the very low prices prevailing for the commodity. In February 1999 Thailand announced that it had also intended to withdraw from INRO. Thailand has become more involved in rubber price intervention and in improving marketing techniques for its smallholders.

"Local" consumption

There have always been natural rubber producers where the aim of the industry is to meet domestic requirements. The most important of these are China and India where large quantities (in excess of 500,000 tonnes) are produced and consumed within the large nations concerned. Brazil and, to an extent, the Philippines also follow this pattern.

Changes in South East Asia

Indonesia, Malaysia and Thailand remain the premier rubber producers, but each has developed highly successful natural rubber consuming/rubber product exporting industries which capitalise on the ready availability of the raw material and low cost but educated labour. Malaysia now consumes in excess of 300,000 tonnes of natural rubber and it has become both a major consumer of natural rubber in global terms (No. 5) and all rubber (No. 6).

What is produced for export?

The main export products are those manufactured from latex: gloves surgical/examination/ industrial/household); condoms; catheters; thread; and bathing caps, but there is also growth in the manufacture and export of a broad range of products including footwear (sporting and industrial waterproof), tyres and a range of industrial rubber goods (many of which are based upon synthetic rubbers). Such manufacturing has greatly added to the value of rubber in those countries which have developed export-led industries; notably Malaysia, Thailand and Sri Lanka. The last-named specializes in the manuafacture of solid industrial tyres.

Developments elsewhere

The industry has suffered from civil strife and war in several countries: notably Vietnam, Cambodia and Liberia. Vietnam has not only recovered, but is now emerging as a major producer. Liberia shows signs of returning to its former role of being a major supplier, especially of latex concentrate, to the United States. Guatemala , Ghana , Myanmar and Papua New Guinea are all expanding capacity. Peru and Colombia are probable new future producers.

Marginal lands

The low prices which have beset natural rubber producers do not encourage cultivation on high class land and there is a trend to develop new cultivation in marginal areas where the trees have to cope with high winds, droughts, low temperatures, poor soils and, in some cases, unskilled cultivators. In India there is a shortage of land available in the traditional area (the State of Kerala) and the Indian Government is seeking to establish cultivation elsewhere. In Brazil, cultivation has developed on the fringes of the Amazon Basin to avoid the effects of SALB, but at the cost of cultivation in a less than optimal climate. Agroforestry or jungle rubber is also increasing in importance, especially in Indonesia. In Indonesia there is a shift away from cultivation in the traditional areas in Sumatra and Java towards new developments in Kalimantan [Borneo] and Irian Jaya. Hevea cultivation is capable of restoring degraded lands.

Timber production

Timber production is pf increasing significance both to increase income at the end of the rubber production cycle, and as an alternative timber crop. Latex/timber clones are being developed to optimize latex and timber outputs. There is now a major market for rubberwood both to meet domestic demand and for export (especially for furniture, where it competes with light coloured timber, such as beech and pine).

Increasing productivity

Until the recent financial crisis South East Asian countries had been enjoying a very rapid rise in the standard of living. This has caused a major labour shortage for harvesting rubber and many trees have remained untapped. There is an urgent need to improve productivity, especially in harvesting.

Tyre [tire] industry concentration

Increasing international competition is forcing many mergers on the automotive industry and its suppliers. This includes the tyre industry and the major suppliers of non-tyre automotive components. The three major tyre manufacturers are Bridgestone, Goodyear and Michelin (all of whom operate web sites). These corporations are based in Japan, the USA and France, respectively. They are genuinely multinational in scale.

Tyre [tire] developments

Most tyres are now manufactured using the radial ply method, with the exception of truck tyres used in the poorer countries where cross-ply tyres continue to be used as trucks are overloaded and the roads are poor. The tyre manufacturers are questing for a higher degree of automation in manufacture, including an ability to be able to produce specific products on relatively short runs. Pirelli has published details of its flexible, automated tyre plants. Holroyd has stated that there is a need to manufacture tyres without metal or fabric reinforcement as this would make manufacture and recycling simpler. The tyre companies are also demanding zero tolerance levels in the quality of their raw materials, and are requesting greater consistency and higher quality for their natural rubber.

Earthquake protection of buildings

The earthquake protection of buildings was developed from bridge bearings and from the protection of buildings from external sound and vibration, such as railways.

Epoxidized natural rubber

Epoxidized natural rubber (ENR) was developed during this period. Conceptually, epoxidation is a relatively old form of modification, but the new form deliberately set out to establish a commercially viable material. Although the material is based upon natural rubber and retains many of that material's excellent characteristics, some of the new material's properties are distinctly similar to several of the speciality synthetics, such as nitrile rubber. ENR is far more resistant to hydrocarbon oils than unmodified natural rubber and offers excellent damping properties.

Blends and thermoplastic NR

It is now possible to produce high quality blends of natural rubber with speciality synthetic elatomers and to manufacture thermoplastic natural rubber. This enables a green material to enter many markets from which it had previously been precluded for several decades, such as automotive weatherstrip.

Low prices

With the exception of a short-lived boom in natural rubber prices caused by the spread of the AIDS epidemic to the USA and a consequential vast increase in the uptake of latex concentrate for the manufacture of disposable protective gloves, natural rubber prices have remained at levels below those which will permit the industry to be sustained.

Malaysian output has declined markedly in recent years as cultivators have switched to other crops: oil palm in the case of estates and fruits in the case of smallholders. In the case of oil palm the environmental consequences are quite severe as greatly increased fertilizer inputs are required. Furthermore, smallholders lose a regular form of income and have to await payment when the fruits are ready to harvest. At the same time there is a growing awareness of the beneficial "green properties" of natural rubber cultivation and the dangers of global warming. Natural rubber is one of a very few industrial raw materials supplied from a sustainable source which is actually beneficial in terms of the global carbon dioxide budget.