For the rubber industry, a gloomy year 2020 in perspective

par Jacques Leroueil

The challenge: to assess the impact of the coronavirus crisis on the rubber industry, particularly in Africa.

According to the Association of Natural Rubber Producing Countries (ANRPC), world natural rubber production is expected to fall by almost 5% in 2020, due to the economic crisis caused by the Covid-19 pandemic, which has led to an overall decline in demand. This sluggishness will de facto affect African producer countries.

In its communiqué, published on 1 June, the ANRPC laments that « the appearance of the Covid-19 pandemic has plunged the world rubber industry into one of the worst crises of recent decades and has thrown the players in the entire value chain into chaos ». As a reminder, the organisation, which groups the main latex-producing nations, was still forecasting an increase in production and demand (by 3.8% and 2.7% respectively) at the beginning of 2020. Since then, the crisis linked to the pandemic has shaken the entire world economy, particularly the automobile industry, the main user of natural rubber for the manufacture of tyres. For example, Japan’s Bridgestone, the world’s largest car tyre manufacturer, had to suspend operations at some plants at the end of April and beginning of May.

The same gloom is expected among the main importing countries: still according to ANRPC estimates, natural rubber imports from China, the world’s largest consumer, should fall by 5.1% compared to last year to reach 4.8 million tonnes, while demand from India, the world’s second largest consumer of rubber, could contract by 21.3%. As a result, world production of natural rubber (as opposed to synthetic rubber, made from oil) is expected to fall by 4.7% to 13.13 million tonnes. An unfavourable situation which, in the short term, will mechanically affect the main African producing countries (Liberia, Cameroon, Nigeria, Ghana and especially Côte d’Ivoire [more than 70% of African production]). However, this will not alter the expansion plans of the major African operators in the sector, which are based on long cycles. The Ivorian agro-industrial company Sifca, for example, inaugurated in March the second latex processing unit of its Ghanaian subsidiary, Ghana Rubber Estates Limited (Grel). Business continues, crisis or not.

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