By P Venugopal

The Chinese Government is determined to raise the country’s NR output to meet the rising demand irrespective of the fact that many provinces of China are unfit for NR cultivation due to unsuitable climate, prolonged drought, typhoon etc.

China is the top consumer of natural rubber in the world, thanks to its booming auto and tyre industries. The country’s domestic production of NR, however, constitutes only a fraction of its demand.

China consumed 4.7 million tonnes of NR in 2015 while the country’s total NR production came to only 794,000 tonnes in 2015. ANRPC expects China’s NR consumption to further rise to 4.9 million tonnes in 2016.

This huge demand-supply gap has forced China to depend heavily on imports. Keeping pace with the rise in consumption, China’s import of NR too is on constant rise, touching 4.1 million tonnes in 2015 from 2.9 million tonnes in 2011. China’s 2016 NR import is estimated around 4.05 million tonnes.
The Chinese Government is determined to raise the country’s NR output to meet the rising demand, irrespective of the fact that many provinces of China are unfit for NR cultivation due to unsuitable climate, prolonged drought, typhoon etc. The Government hopes to fight the odds by introducing scientific farming practices, developing suitable clones, providing incentives to farmers etc.

Main rubber areas

Natural rubber production in China comes from two main growing areas namely, Yunnan and Hainan provinces. Xishuangbannacan be deemed as the rubber capital of Yunnan province. In Yunnan, rubber plantations are a lucrative business and rubber area has expanded dramatically over the past two decades.
Geographically, Hainan is not a suitable area for rubber due to typhoon and seasonal cold climate (18⁰-19⁰N). Against all odds, rubber cultivation has flourished in Hainan.
Suitable area for expansion is said to have reached the limit in Yunnan and Hainan. Rubber plantations in Hainan is almost equally divided in area between State farms and smallholders.
Besides Yunnan and Hainan, rubber trees are also planted in Guangdong, Guangxi and Fujian provinces, although in small areas.
The Government is offering incentives to the province’s economically backward farmers to plant rubber as a way to overcome poverty. Many of them are from ethnic-minority groups. As a result, rubber cultivation in the smallholding sector has achieved tremendous progress to the extent that smallholders now account for 61% of NR production in China.

Rubber planting drive

The steps undertaken by the Government are showing results. China’s Total Rubber Area and Tapped Area have seen substantial expansion in recent years. The Total Rubber Area, which stood at 34,000 ha in 2009, increased to 111,200 ha in 2015 and is expected to further increase to 132,500 ha in 2016.
China undertook replanting in 20,000 ha. and new planting in 5,000 ha. in 2015. The country is expected to undertake replanting in another 16,000 ha and new planting in 4,000 ha in 2016.
China’s Average Annual Yield (kg per hectare of tapped area) stood at 1,117 kg in 2015.
As a result of all these measures, China’s annual production of NR, which stood at 727,000 tonnes in 2011, rose to 794,000 tonnes in 2015.

Import tariff regulation

Demand for high-quality rubber industry products and tougher tyre import quality requirements in the European Union and the US have prompted the Chinese Government to adopt stringent measures to ensure the quality of imported and locally produced rubber.
The country has introduced a new import tariff regulation on import of compound rubber thereby only rubber containing 80% of NR is permitted, or else a higher import tariff will be applied.
Import tariff on NR latex is 10% or RMB900 per MT, while import tariff on RSS is 20% or RMB 1,500 per MT. The accompanying chart shows that import of rubber mixture has shown a significant increase after implementation of new NR import tariff regulation.
China reckons that it can’t compromise on quality if the country is to remain as the world’s unchallenged rubber power house.