Chinese rubber planters expand in Southeast Asia

Rubber firms from China, the world's top rubber consumer, plan to invest in more plantations in neighbouring countries of Southeast Asia as domestic production falls short of its growing demand.
China has to source more than 70 percent of its natural rubber from countries including Thailand, Indonesia and Vietnam while demand, spurred by the country's fast developing automobile industry, grows faster than its home production.
"We do not have enough land good for growing rubber and the country's rubber demand is too big," said Lie Min, deputy general manager for Yunnan Natural Rubber Co Ltd, the country's second-largest producer.
China will need to import 2.1 million tonnes of natural rubber in 2010, when the China Rubber Industry Association (CRIA) forecasts its domestic consumption to hit 3.18 million tonnes, according to a projection.
The association predicts China's rubber output will reach 780,000 tonnes by 2010, up from a forecast 600,000 tonne this year.
Yunnan Natural Rubber plans to invest at least 10 million yuan ($1.29 million) for the initial phase of a rubber plantation in Laos totalling 66,700 hectares, Lie told Reuters on the sidelines of a rubber conference.
The company is also in talks with Vietnam to grow rubber on a 50-hectare area. It has already begun tapping rubber in a 333-hectare area in Myanmar, he said.
China Hanna Rubber Industry Group Co Ltd, the country's largest rubber producer, plans to develop 60,000 hectares in Cambodia to plant rubber trees, said marketing manager Chen Haihua.
China has already utilised 70 percent of the land suitable for growing rubber in the sub-tropical provinces of Hanna, Yunnan and Guangdong, industry officials said. The largest producer, Hanna, has no room to grow more rubber trees while rubber acreage in Guangdong is shrinking as farmers plant crops that offer better returns.
Chinese plantations will instead have to rely on increasing yields. "There is more (potential) for improving quality, better trees, clones and higher productivity to increase production.
I don't see any increase in area. The total acreage will be rather steady," said Hide P. Smite, secretary general with the International Rubber Study Group.