• Wednesday, June 19, 2024
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BusinessDay

Stakeholders urge revival of rubber to spike non-oil revenue

non-oil exports

Stakeholders have urged the Federal Government to revitalise rubber production in the country, as this will further boost government revenue from the non-oil sector.

The call became necessary so that the FG could tap the full potential in agriculture, a sector where the country has comparative advantage over others in areas of crop production, revenue generation, employment and rural development.

Rubber is the fourth largest foreign exchange earner for Nigeria after crude oil. Government has since neglected rubber production, thereby throwing farmers out of business.

There are currently very few rubber farmers in Nigeria, owing to poor profitability of the business, long tenor of planting and harvesting, low local and international prices and lack of a good value chain system.

Most players in the industry prefer planting more profitable crops with short harvest period. It takes between seven and eight years to grow a rubber crop.

Ede Dafinone, CEO, Sapele Integrated Industries Limited, a key crumb rubber processor, attributes the capacity crash in the industry to lower yield in plantations, dwindling supply of rubber from rubber trees as well as declining prices of international market.

“Lumps from trees are in short supply because most of the rubber trees today were planted in the 1960s and 1970s, adding that the trend has continued because the trees have a life of 30 years,” he adds.

“I foresee export of rubber falling by as much as 50 percent,” he further stated in an exclusive interview with BusinessDay.

Before now, Nigeria had been known for the export of the three major cash crops; palm oil, groundnuts and rubber; but presently, little or nothing is heard about these sources of foreign exchange.

Rubber is used in the manufacture of a number of industrial products, which ranges from tires, balls, containers, shoes, bands and a lot of other items. Rubber is important in the socio-economic life of many tropical-developing nations.

The capacity in Nigeria’s rubber industry has fallen from well above 130,000 metric tonnes per annum to between 65,000tpa and 60,000tpa on account of the failure to replenish old plantations and establish new ones, according to experts.

The International Rubber Group (IRSG) in 2014 predicted that there would be strong global demand for rubber through to the end of the decade. The demand-supply gap of natural rubber is predicted to significantly widen in the course of the current decade and likely to end up in a shortage of as much as one million tonnes by 2020.

The gap between the forecasted production of natural rubber (12.5 million tons) and the forecasted consumption (13.6 million tons) will be 1.1 million tons, IRSG adds.

To meet this anticipated increase in demand for the commodity, the group recommended increase in the hectarage under new cultivation and yield particularly under small holding farmers.

They revealed that current major rubber producers mainly Malaysia and Thailand are facing land constraints for natural rubber due to severe competition for land by other crops mainly palm oil, the same with Vietnam, China and India.

For the needed increased hectarage and yield therefore, Africa (West and Central) are among the sub-regions to be targeted with an estimated production capacity of 680,000 tons in 2020.

However, while increases are expected from countries like Liberia, Cote d’Ivoire and Cameroon, the forecast for Nigeria is that production would remain static unless the natural rubber industry particularly in the smallholder sector is revived.

Stakeholders say more attention should be paid to adding value to rubber through processing to increase its market worth and bring higher foreign exchange into the country.