The global natural rubber market was once dominated by Brazil. As the automobile industry grew, the market for rubber production shifted from the Americas to Asia. To counter that shift, the Ford Motor Company attempted to establish new rubber plantations in Brazil from 1928-1945.
By 1940, Belterra had more than 2,000 workers and 7,000 inhabitants. Almost 1,000 houses had been built, along with barracks that could accommodate 1,000 people. With the Ford plantations, over 3.6 million rubber trees were added to the Brazil rubber industry. The initial investment from Ford totaled $2 million. When the plantations were transferred to the Brazilian government, the total investment had reached $20 million.
The issue of global dominance is still one that bothers Brazil producers. In 1876, Henry Wickham of England took 70,000 rubber seedlings and had them cultivated in the East Indies. That one act changed where and how natural rubber was produced and still does to this day.
Important Brazil Rubber Industry Statistics
#1. The Americas are responsible for 3% of the world’s natural rubber production, while consuming 14% of the global market. Almost all of the rubber that is produced and consumed happens in Asia, where 92% of rubber is produced and 74% of it is consumed. (Ministry of Agriculture, Livestock, and Food Supply)
#2. Brazil produces about 11.3 million tons of natural rubber products each year. The country consumes about 11 million tons of rubber annually too. (Ministry of Agriculture, Livestock, and Food Supply)
#3. Over 200 million hectares of land have been designated as being a 100% suitable area for sustainable rubber expansion without causing deforestation. (Ministry of Agriculture, Livestock, and Food Supply)
#4. Brazil today represents 1.5% of the total natural rubber output which reaches the global market each year. 60% of the natural rubber that is consumed each year in Brazil is sourced from the export market. (Ministry of Agriculture, Livestock, and Food Supply)
#5. Sao Paulo leads Brazil in total rubber production, responsible for 57% of the rubber industry in the country. Bahia contributes another 15% of the total production. (Ministry of Agriculture, Livestock, and Food Supply)
#6. Argentina receives the majority of the natural rubber exports that are produced in Brazil. Total export values in 2016 were over $993 million. The United States came in second, with $819 million in exports. They were followed by Colombia ($313.9 million), Chile ($294.6 million), and Belgium ($206 million). (World Integrated Trade Solution)
#7. Imports to Brazil within the rubber industry, in terms of value, were led by the United States, with $1.9 billion in value. China also provided $1.07 billion worth of natural rubber products in 2016. (World Integrated Trade Solution)
#8. In terms of product volume, 26.8% of the imports to the Brazil rubber industry came from Colombia. Thailand provided another 18% of the imports. The United States was third, with just 8%. (World Integrated Trade Solution)
#9. It takes between 5-8 years for a rubber tree to mature in Brazil’s climate. The Hevea brasiliensis can only be grown in conditions to what are similar to the rainforest of the Amazon as well. The total economic life of the average rubber tree is 30 years or less. (International Rubber Study Group)
#10. For total natural rubber production in the world today, Brazil ranks 11th. They are the top-ranked producer of rubber products outside of the Asia-Pacific region. (Fact Fish)
#11. More than 189,000 tons of rubber was produced by the Brazilian rubber industry in 2016, harvested on more than 146,000 hectares. (FAOSTAT)
#12. 65 tons of natural gums were also produced by the rubber industry in Brazil in 2016. (FAOSTAT)
#13. The natural rubber yield, in hectograms per acre, was 12,931 in 2016. (FAOSTAT)
#14. In 2000, the Brazil rubber industry produced 87,800 tons of natural products. The total production available to the industry has doubled within the past 20 years, showing consistent year-over-year growth from 2003 to 2015. (FAOSTAT)
Brazil Rubber Industry Trends and Analysis
The rubber industry in Brazil is a small, but stable part of the local economy. Although the domestic supply comes nowhere near to the demand each year, the industry can play a role on the global market as a disrupter. In any given year, Asia produces 90% of the world’s rubber. Africa and Europe contribute a consistent 5%, which leaves Brazil with the remainder of what the market provides.
Asia seeks to dominate the rubber market, however, which places limits on the amount of market space that Brazilian rubber is able to obtain. Synthetic rubbers impact the market as well, which means expansion opportunities are difficult.
Difficult, however, is not the same as impossible. There are thousands of degraded hectares of pasture lands which could be converted into rubber plantations. Innovative technologies make it easier than ever to grow and harvest natural rubber products. Pricing may be near historic lows, at just 1.45 on the Singapore market as of June 2017, but it was 4.52 per kg in 2011.
Is it time for natural rubber to make a comeback in Brazil?