WHAT IS THE FAITH OF NATURAL RUBBER INDUSTRY IN 2016?
By Bayo Lawal

The nose diving of International Price that the sector has been experiencing for about four years now has been creating a lot of concern to the stake holders the world over. Nigeria as a prominent player in the Industry is not left out of this panic as major players in the industry in the country have been telling bitter story ranging from drop in quantity of raw materials to low market as a result of low price of Natural Rubber in International Market.
The quantity of Natural Rubber processed in Nigeria is more than the local consumption hence,the product is majorly for exportation. The unprecedented drop in International Price of Rubber has created unpalatable glut in the local market. This has led to some Rubber Processors to be lobbying in getting their products to the warehouses of local users of the Rubber Crumb.
The Nigerian Rubber Tappers are getting worse share of the low price as most of them could not meet up with their domestic immediate needs like food,clothing and payment of school fee of their children. Most of them have abandoned tapping for other jobs like transportation(Ridding Motorcycles popularly called okada),farming and local trading among others.
Nigeria situation is worse because it is very difficult for a concrete decision as the stakeholders are not well organised as a body to regulate the affairs of Rubber Industry in the Country. The Stakeholders must do something about this malady if the industry must come back for better.
As regards the price and state of Rubber industry in 2016, i will like to present Supunnabul Suwannakij's view in his article titled
"World Rubber Demand Slowdown to Weigh on Prices Through 2020" This article was published in 2015 as presented below:
"" World demand for natural rubber will probably slow through 2016 as consumption growth weakens in China, the biggest importer, curbing prices of the raw material used in everything from tires to medical gloves and condoms.
Expansion will moderate to 3.5 percent in 2016 from 3.9 percent this year and 4.1 percent in 2014, according to Hidde Smit, former secretary general of the International Rubber Study Group. China’s demand will rise 4.8 percent next year from 6 percent in 2015 and 7.1 percent last year, Smit estimates.
Futures have plunged 75 percent from a record in 2011 as maturing trees in Asia boost latex production and China’s economy grows at the slowest pace since 1990. The slump in prices cut costs for tiremakers such as Goodyear Tire & Rubber Co. and spurred efforts by Thailand, Indonesia and Malaysia to restrain supply by limiting exports and felling trees.
“I foresee a continuation of the decline in growth rates in China over the coming years,” Smit said in e-mails last week. While the surge in new planting from 2005 through 2011 will boost world supply, consumption will grow at a much slower pace, said Smit, who headed the Singapore-based IRSG, an intergovernmental organization, from 2005 to 2009.
Futures in technically specified rubber used in the tire industry traded at $1.427 a kilogram in Singapore on Monday, down from a peak of $5.75 in February 2011. Prices may stay at about $1.50 to $1.60 through at least 2020, said Smit, an industry adviser. Futures averaged $2.54 in the past 10 years, data compiled by Bloomberg show.
Lower Costs
Goodyear, North America’s largest tiremaker, posted a record segment operating income of $1.7 billion in 2014, up 8 percent from a year earlier, helped by lower raw material costs, the company said on Feb. 17.
Rubber prices slid 5.5 percent this year, extending four annual losses. China’s economy has cooled as officials rein in local-government debt, crack down on graft and strengthen environmental laws. The targeted expansion of about 7 percent this year would be the smallest increase since 1990.
“Slowing Chinese growth, particularly in a low inflation environment is a headwind for all industrial commodity demand, including rubber,” Colin Hamilton, head of commodities research at Macquarie Group Ltd. in London, wrote in an e-mail.
While Prachaya Jumpasut, managing director of The Rubber Economist Ltd., also sees global demand slowing, he says he expects production to expand at an even lower rate, resulting in a shortage of 470,000 tons in 2016.

Global Shortage
The world market will also have a deficit of 449,000 tons this year, the widest since 2000, which would cut inventories to 2.47 million tons from a record of almost 3 million tons in 2014, said Prachaya, a London-based industry adviser who has studied the market for more than 30 years.
Smit sees a decline in global stockpiles of 70,000 tons this year and an increase of 75,000 tons in 2016.
“I do not see this as a supply shortage but a correction on a rather high stock level at the end of 2014,” Smit said. “There will be a net stock build-up during 2016.” The Rubber Study Group in Singapore in January estimated a global surplus of 77,000 tons this year and of 51,000 tons in 2016.
Officials from Thailand, Malaysia and Indonesia, which account for two-thirds of global production, decided in November to limit exports in an effort to tighten supply. Thailand, the biggest shipper, is also buying rubber from farmers at above market rates to boost domestic prices and is encouraging farmers to cut down aging trees.
Global consumption will be 12.75 million tons next year from 12.32 million tons in 2015, while output will total 12.83 million tons from 12.25 million tons, Smit estimates. Use by China is poised to increase to 5 million tons in 2016 from 4.78 million tons this year and 4.51 million tons in 2014, he says. ""
This Industry must not die but all our hands must be on deck to do all the rightful to get there.
Best of luck to all players in the Natural Rubber Business in 2016 and beyond
## Bayo Lawal