ASEAN KEY DESTINATIONS
Asean’s new “white gold”
Although one sees many traditional gold shops in almost every major Asian city, the lustre of that precious metal has a new competitor-rubber- or the new “white gold” of Asean.
Like other stressed commodities, the rubber market is under stress and supply is expected to lag behind demand for the next two years as expanding auto markets in India and China account for more vehicles on the road most of them accounting for at least four tires.
The global economic recovery and growth in China are powering demand for rubber products. World auto sales, led by Chinese demand, increased 8 percent in 2010, to 68.5 million cars, and will increase 7.2 percent, to 73.4 million cars, this year.
Originally collected from wild trees in South America, production is now centered in Asean countries, especially Thailand. The leading latex producing countries are Thailand, Indonesia and Malaysia that account for 72 percent of the world supply of raw latex.
The life of a rubber tree is generally calculated to be about 32 years, 7 years when its considered immature and 25 years of actual production. Production in Thailand in southern Thailand but with the surge in demand, rubber plantations are moving northward.
Rubber has slumped 15 percent in the last week, but analysts see the slump as a prelude to record highs. Prices may advance by up to 32 percent to 605 yen a kilogram ($7,407 a metric ton) by December, according to estimates.
Analysts estimate that stockpiles on hand are tantamount to only 69 days of demand, the lowest numbers in more than a decade.
If readers are not interested in investing in a rubber plantation, the trees also make excellent house plants.
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