Global production of natural rubber is running at some 12 million metric tonnes annually (12.2m mt 2013/ 11.8m mt 2014).China and the USA are the world’s joint leading consumers of natural rubber, each taking some 18% of global production. The phenomenon of Asian growth in the first decade of the 21st Century, (China & India in particular) prompted a dramatic increase in new rubber plantations and today there is evidence for a building appetite for rubber producing assets, particularly as urban drift induced labour shortages in Asia and climate change are seen as a threat to current and future productivity; some industry experts believe that climate change has already reduced Thailand’s productivity by more than 5%. Thailand is the world’s leading producer country, accounting for some 34% of global output. According to Dr S Sivakumaran, Executive Director, Research & Development, Greenyield Berhad, Malaysia “The global scenario for natural rubber is very encouraging with projections of increasing demand till 2020 and possibly beyond…”. Attention is now turning to West Africa as a source of production growth. Like South East Asia, West Africa has a highly suitable climate for rubber cultivation and a large pool of economically priced agricultural labour. Liberia and Cote d’Ivoire are both potentially important producers, but today only account for around 2%-4% of global output. Liberia has some 10m hectares of land available for agriculture of which oil palm developments are now expected to use at least 1m hectares, but rubber plantations account for only 200,000ha today, something the Government of Liberia reportedly would like to see changed.
Hardman Agribusiness has noted that there is considerable interest in brown field rubber assets from existing producers. Their requirements however are not typically so easy to meet and include:
- Clean title to land assets
- Uncontested right to occupy and develop the land
- Scalable land assets being typically economic units of 5,000 – 20,000 ha
- Productive assets providing immediate revenues
- Scope for development of out-grower communities.