Since January 1, the implementation of European RDUE standards has caused significant disruption in imports of products from Africa, including rubber, cocoa, and coffee. This reform is designed to combat deforestation and enhance production conditions, with a focus on ensuring fair remuneration for producers and eradicating child labor. In Côte d’Ivoire, the rubber industry is actively mobilizing to meet these stringent new requirements.
Objective : Traceability of the rubber industry
The implementation of the reform faces a primary challenge in achieving traceability. To address this, plantations are being geolocated to verify their compliance with protected areas. However, this endeavor demands substantial resources, prompting efforts to establish a unified database across the country for optimal traceability.
Sustainability of rubber production is also paramount. Importing companies are choosing to procure directly from planters to ensure control over the rubber’s origin. By assessing the delivery capacity of each plantation, companies can detect potential fraud. In instances of uncertainty, production is redirected to destinations with less stringent requirements.
Partnership opportunities for producers
Despite the challenges posed by the standards, the rubber trade association perceives opportunities on the horizon. With Europe currently representing only 20 % of Ivorian exports, there exists substantial room for growth within the European market. Additionally, the European market offers more lucrative remuneration prospects. Consequently, these new standards have the potential to elevate the value of Ivorian rubber and yield quality premiums for producers.
In essence, the implementation of RDUE standards presents both challenges and opportunities for the Côte d’Ivoire rubber industry. By embracing these new requirements, stakeholders in the sector stand to bolster their presence in the European market while ensuring sustainable and ethical production practices.
Ranking trend 2024 : Côte d’Ivoire 2nd largest rubber producer worldwide
At the current pace of advancement, Côte d’Ivoire is poised to surpass Indonesia as the world’s second-largest rubber producer by 2024. However, several factors may impede the swift acceptance of supply from new sources, including existing market relationships, quality standards, sustainability practices, as well as transportation costs and delivery times.
In an oversupplied market, heightened supply from Africa could intensify price competition. While this may lead to a downward trajectory in physical rubber prices, its effect on futures remains uncertain.
Notably, Japanese trade data signals a shift in trade patterns, with 92 tonnes of technically specified rubber (TSR) imported from Côte d’Ivoire between August and October 2023. Concurrently, Côte d’Ivoire’s customs records indicate approximately 113 tonnes of TSR exported to Japan during the same period, indicating exploration of new supply routes by consuming regions like Japan.
Furthermore, October 2023 witnessed agricultural Ivory Coast’s highest production levels since 2007, contrasting with production declines observed in Indonesia throughout the same timeframe. Thailand, Vietnam, and Côte d’Ivoire, among the five largest producing regions, experienced production increases.
Rubber price trend to 2024
The downward trajectory in rubber prices persisted throughout 2023 until August, when China implemented measures to bolster its economy. As the largest global consumer of natural rubber, these policies provided a boost to both physical rubber and rubber futures prices, fostering a more favorable pricing landscape.
Despite the declining prices, consumption among the five largest consumers actually surged in 2023. This group witnessed a collective increase of 139,000 tonnes in annual consumption by October 2023, primarily driven by heightened demand in China. This disparity between rising consumption and falling prices can be attributed to oversupply within the rubber market.
Anticipated interest rate reductions in 2024 could further stimulate consumption, potentially leading to continued growth. Consequently, both physical rubber and rubber futures are expected to thrive within an upward pricing environment.
