Sudden spurt of foreign demand for local rubber

http://www.newagebd.com/2010/may/01/busi.html#1

Sudden spurt of foreign demand for local rubber
Shakhawat Hossain

Local rubber growers are having a good time as a growing number of international traders are looking for rubber in Bangladesh because of the current shortage of the item in the global market.

The Bangladesh Rubber Garden Owners Association’s general secretary, Harun-ur Rashid, told New Age on Thursday that businessmen from Turkey, Pakistan and India have come here looking for rubber.

Some growers have already shipped out around 1,200 tonnes of rubber in the last six months and many other orders have already been received. The global shortage and price-hike of rubber were forcing the international traders to treat Bangladesh as an alternative source, he added.

Growers said that a large number of foreign traders were looking for rubber here as its price in the local market was at least $1 lower per kg than that of current global price, which has soared in an unprecedented manner.

According to the London-based Financial Time, the price of natural rubber, the commodity used to make products ranging from tyres to condoms, has hit an all-time high [above $3.50 per kg] in the current month after a severe drought in Thailand, the world’s largest producer, curtailed supplies.

The price-hike of rubber has broken one of the longest standing price records in commodities, dating back to 1952, when fears about the potential spread of the Korean War to key South-East Asian rubber-producing countries triggered panic buying, added the Financial Time.

Besides the international shortage that has led to traders coming here, local consumption of rubber has also gone up substantially, elating the local growers, said a senior official of the Bangladesh Forest Industries Development Corporation. The BFIDC, the state-owned rubber plantation, cleared its stock-lot of 6,000 tonnes of rubber four months ago, though it has been facing difficulties in clearing its stock-lot since 2008, he added.

The rubber growers said that the country produces about 10,000 tonnes of rubber per year with BFIDC accounting for 60 per cent of the production. The other 40 per cent comes from the private growers who were permitted to plant rubber trees in the 1980s.

The country has attained self-sufficiency in rubber, which is mainly bought by footwear industries and tyre and tube producers.

Rubber has huge export potential, especially to India that imports nearly 1,00,000 tonnes of rubber to meet its internal demand of 10,00,000 tonnes annually.