OPPORTUNITY FOR PHILIPPINES: World demand for rubber to grow 3.7 percent in 10 years means BUSINESS

DAVAO CITY - The world demand for natural rubber is expected to grow by 3.7 percent in the next 10 years, creating huge, growing export and domestic market opportunities for the Philippine rubber industry.

Currently, rubber plantations worldwide stands at 11.3 million hectares which churns out an average output of 10.2 million metric tons, according to a recent report of the Department of Trade and Industry (DTI) assistant regional director Sitti Amina M. Jain of Zamboanga.

“We need to take advantage of the increasing global market demand for rubber,” Jain said.

Presently, 85 percent of the country’s total rubber production is exported mostly as field lumps or cup lumps. The remaining 15 percent is processed as rubber crumbs and crepe for domestic consumption.

“Ironically, while we are exporting the bulk of our natural rubber, a tire manufacturer — Yokohama Tire Philippines Inc. imports 94 percent of its natural rubber requirements from Thailand and Indonesia,” Jain said in her report.

"The Philippine rubber production stands at only a little over one percent of the entire world’s production of rubber. Rubber plantations in the country are predominantly held by small farm owners with only 3 to 10 hectares of farm land," Jain explained.

"A hectare of rubber plantation can yield an average of 5 metric tons of raw rubber called cup lumps. They are sold to traders or direct buyers and providing yearly earnings of P250,000 to the small farm owner," she added.

Based on her report, 75 percent of all natural rubber produced worldwide is used as raw material in the manufacture of rubber tires.

The remaining 18 percent is used in manufacturing shoes and non-tire industrial products like hoses and belts while 12 percent goes to the manufacturing of gloves.

Jain, who also heads a rubber industry cluster manager under the National Industry Cluster Capacity Enhancement Project (NICCEP), said almost all (99 percent) of all raw rubber produced in the country comes mainly from the southern island of Mindanao, with small pockets of plantations in Luzon adding to the overall yearly rubber output.

The rubber industry in Mindanao registered a total area of 138,710 hectares in 2010 which created some 277,420 jobs based on the ratio of two jobs to a hectare of rubber plantation.