NR sector faced numerous hurdles in 2021

The natural rubber market had a rocky journey during 2021. It was one where the impact of the COVID-19 pandemic almost caused more distress for the sector this year than in 2020.

The supply-demand balance was one area of concern, with demand increasing from the depths of the coronavirus-induced collapse faster than NR supply could rebound.

There also were continued efforts throughout 2021 to make life better for the smallholders responsible for roughly 85 percent of the world's supply of natural rubber, coupled with work to make the entire NR supply chain sustainable.

In addition, there was no slowdown in the research to develop alternative forms of natural rubber that someday can make the rubber industry less reliant on the NR sourced from the traditional nations in Southeast Asia.

Global measures to prevent the spread of COVID-19 in 2020 caused demand to plummet, but when the need for NR began to grow once again, issues such as flooding and tree disease made it difficult for NR suppliers to meet demand.

"(I'm) worried about supply," Ryan Wiener, global head of sustainable development and strategic marketing for Corrie MacColl Ltd., told Rubber News in March. "Years of low prices have allowed demand to outpace growth in supply, and it's high time the world realizes that the material, which is so vital in powering humanity's mobility, is scarce."

Besides the difficulty in securing enough supply of natural rubber, the supply chain issues that continue to plague all industries hit the NR sector particularly hard. While what may have cost $2,000 a ton to ship previously, now was costing NR suppliers more than double or even triple to ship, industry sources said.

"You have what I call a perfect storm on natural rubber," said Whitney Luckett, founding president of Southland Rubber Inc."

Wiener said it all reinforced his premise that natural rubber continues to be under-appreciated. "Natural rubber is listed on the European Union's Critical Raw Material list, and to this point, there is no replacement material," he said.

Potential shortages of NR both now and in the years to come remain a distinct possibility. Wiener said his firm projects that demand could outstrip supply by as much as 900,000 metric tons a year by 2027.

Luckett said that one huge factor that leads to supply shortage is the length of the supply chain, saying that just-in-time techniques can't function properly when the supply chain spans 15,000 miles.

She added that taking care of the smallholders and helping them remain financially viable is one of her top concerns. Without proper pricing, they won't be able to afford adequate living standards let alone care for their crops.

Corrie MacColl, in fact, set up a program in 2020 that is intended to improve farmers' lives. Wiener said there are 6 million smallholders in the world producing rubber, and they face some of the toughest environmental and social issues of anyone.

So Corrie MacColl developed the Cameroon Outgrower Programme with the idea of helping small rubber farmers improve their agricultural skills. For example, the program will help the smallholders learn about sustainable agriculture methods that will help protect against deforestation.

"What they do is slash and burn," Wiener said. "Their farming practices are as bad as they can be. What this does is it creates a negative impact on the world's environment, especially when it comes to climate change."

The program is intended to benefit the company as well, as the education should bring higher rubber yields that Corrie MacColl will have available for its customers.

In addition, a dozen leading tire makers aligned their natural rubber procurement policies with the policy framework of the Global Platform for Sustainable Natural Rubber. The policies now feature components such as commitment to legal compliance; healthy functioning ecosystems; respecting human rights; community livelihoods; supply chain assessments; and traceability, monitoring and reporting.

According to the GPSNR, the policy framework will bring an estimated 13.6 million acres of land used for rubber production under the purview of sustainability commitments. The Singapore-based group said the actions will positively impact more than 3 million smallholders.

Tor Hough, CEO of Elm Analytics L.L.C.. said the biggest issue for North America is establishing a sustainable onshore supply. "Without a national stockpile there needs to be some kind of mechanism that makes it commercially possible for that intermediate to handle those onshore inventories of rubber," he said.

Research on alternative NR supply sources has been ongoing for decades, and that continued during 2021. With more than 90 percent of the world's natural rubber supply coming from hevea trees, primarily grown in Southeast Asia, those in the industry have been looking at such plants as guayule, Russian dandelions and even sunflowers as potential future NR sources that can be commercially viable.

Bridgestone Americas Inc. and Nokian Tyres P.L.C. are two firms that continue to look closely at guayule.

Nokian said guayule shows promise beyond its ability to blend well into rubber compounds and demonstrate properties similar to hevea rubber. Those include the plant's ability to revitalize regions or areas not typically conducive to farming.

"By researching the commercialization of guayule tire-grade natural rubber, we are working to diversify the world's natural rubber supply and help establish a more sustainable and predictable business path," said Andrew Thompson, director of sustainability policy for Bridgestone Americas.

The firm focuses its development work at its Biorubber Process Research Center in Mesa, Ariz., opened in 2014.

Thompson said by the end of the decade Bridgestone expects to be "scaling guayule productivity, establishing new production processes and improving logistics."