ASIA-PACIFIC FORESTRY SECTOR OUTLOOK … 40 World furniture exports in 1992-1995 ... Asia-Pacific...

ASIA-PACIFIC FORESTRY SECTOR OUTLOOK STUDY

WORKING PAPER SERIES

Working Paper No: APFSOS/WP/50

THE UTILIZATION, PROCESSING AND DEMAND FORRUBBERWOOD AS A SOURCE OF WOOD SUPPLY

by

Joerg BalsigerConsultant

FAO Regional Office for Asia and the Pacific

Jamal BahdonConsultant

FAO Forestry Planning and Statistics Branch

and

Adrian WhitemanForestry Officer (Sector Studies)

FAO Forestry Planning and Statistics Branch

Forestry Policy and Planning Division, RomeRegional Office for Asia and the Pacific, Bangkok

Rome, December 2000

Balsiger, Bahdon and Whiteman

The utilization, processing and demand for rubberwood as a source of wood supply

The Asia-Pacific Forestry Sector Outlook Study is being undertaken under the auspices of theAsia-Pacific Forestry Commission.

This report comes under Workplan Number E24.2.

Asia-Pacific Forestry Sector Outlook Study Working Paper Series No: 50


TABLE OF CONTENTS

INFORMATION NOTE ON ASIA-PACIFIC FORESTRY SECTOR OUTLOOK STUDY ...................................................................................... I

ABBREVIATIONS ...................................................................................................... III

EXECUTIVE SUMMARY............................................................................................ V

1 INTRODUCTION........................................................................................................... 1

2 RESOURCE PROPERTIES.......................................................................................... 32.1 Asian origins.................................................................................................................................... 32.2 Rubber tree cultivation................................................................................................................... 32.3 Environmental considerations ....................................................................................................... 52.4 Rubberwood yield ........................................................................................................................... 72.5 Rubberwood properties.................................................................................................................. 8

3 RESOURCE AVAILABILITY.................................................................................... 113.1 Rubber plantations ....................................................................................................................... 11

3.1.1 Indonesia.............................................................................................................................. 133.1.2 Malaysia............................................................................................................................... 143.1.3 Thailand............................................................................................................................... 163.1.4 India..................................................................................................................................... 173.1.5 China.................................................................................................................................... 18

3.2 Rubberwood production .............................................................................................................. 193.2.1 Malaysia............................................................................................................................... 193.2.2 Thailand............................................................................................................................... 203.2.3 India..................................................................................................................................... 21

3.3 Ownership...................................................................................................................................... 223.3.1 Indonesia.............................................................................................................................. 233.3.2 Malaysia............................................................................................................................... 24

3.4 Switch to other crops .................................................................................................................... 25

4 RUBBERWOOD UTILIZATION............................................................................... 274.1 Industrial processing of rubberwood .......................................................................................... 28

4.1.1 Primary industrial processing............................................................................................... 284.1.2 Secondary industrial processing........................................................................................... 314.1.3 4.1.3. Other uses .................................................................................................................. 33

4.2 Rubberwood cost and prices ........................................................................................................ 334.2.1 Stumpage prices................................................................................................................... 344.2.2 Log and sawnwood prices.................................................................................................... 35

4.3 Current consumption in producing countries ............................................................................ 384.3.1 Consumption by the primary processing industries ............................................................. 384.3.2 Consumption by the secondary processing industries.......................................................... 38

4.4 Current world demand for rubberwood..................................................................................... 38



5 OUTLOOK.................................................................................................................... 415.1 Rubberwood availability...............................................................................................................41

5.1.1 Malaysia ...............................................................................................................................425.1.2 Thailand................................................................................................................................445.1.3 Indonesia ..............................................................................................................................45

5.2 Rubberwood demand by processing industries...........................................................................465.3 Export potential of rubberwood furniture ..................................................................................475.4 Export potential of rubberwood sawnwood................................................................................53

6 CONCLUSION ............................................................................................................. 55

REFERENCES.............................................................................................................. 57

ANNEX A: NOMENCLATURE OF RUBBER TREE CLONES............................ 61Clonal seedling families ............................................................................................................................62



LISTING OF FIGURES AND TABLES

Figure 1 World production of natural rubber in 1999.................................................................4Figure 2 Nutrient removal and yield of different crops...............................................................6Figure 3 Rubber plantation harvesting in major Asia-Pacific producer countries

in 1990-1999...............................................................................................................12Figure 4 Rubber plantation harvesting in minor Asia-Pacific producer countries

in 1990-1999...............................................................................................................13Figure 5 Age distribution of rubber plantations in Peninsular Malaysia in 1993 .....................16

Figure 6 Wood quantity exploited from old rubber trees in Thailand in 1986-1996 ...............20Figure 7 Oil palm and natural rubber areas harvested in Malaysia 1990-99.............................26Figure 8 Flow of rubberwood logs and primary products in Malaysia in 1992 ........................27Figure 9 Malaysian exports of furniture in 1988-1995 .............................................................32Figure 10 Adjusted outlook to 2016 for rubberwood log availability in Malaysia .....................44

Figure 11 Adjusted outlook to 2016 for rubberwood sawnwood availability in Malaysia .........44 Table 1 Usable and available trunk volume/ha from nine Hevea cultivars before felling.........8Table 2 Strength properties of (air-dried) rubberwood and other species .................................9Table 3 Rubber plantation area of major producing countries in 1999 ...................................11Table 4 Rubberwood production trend in the three top countries ...........................................12Table 5 Trend in Malaysia’s rubber plantations 1990-1999....................................................15

Table 6 New planting and replanting of rubber in Thailand in 1992-1996 .............................17Table 7 Rubber plantation areas in India in 1990-97...............................................................18Table 8 Rubberwood plantations in China - 1992 (‘000 ha) ...................................................18Table 9 World rubberwood log production in 1991 ................................................................19Table 10 Malaysia’s planted acreage of natural rubber and rubberwood log production..........19

Table 11 Rubberwood exploitation in Thailand, 1986-1996.....................................................21Table 12 Age distribution of rubber trees felled in Thailand in 1996 .......................................21Table 13 Proportion of rubber plantations owned by estate and smallholders

in selected rubber producing countries in 1998 ..........................................................22Table 14 Average annual income (per hectare) of farmers with jungle rubber

and clonal rubber in Indonesia in 1999.......................................................................23Table 15 Area of rubber plantations held by estates and smallholders in Malaysia in 1990-9924

Table 16 Trends in estate crop areas harvested in Indonesia 1990-1999...................................25Table 17 Crop diversification in rubber replacement planting in Thailand 1992-1996 ............26Table 18 Malaysian export of rubberwood sawnwood to major countries*..............................28Table 19 Properties of single-layer particleboards made from rubberwood flakes ...................29Table 20 Properties of rubberwood MDF..................................................................................30

Table 21 Existing and projected capacity of MDF plants in 1996.............................................31



Table 22 Secondary rubberwood processing and utilization in China in 1994 ......................... 31Table 23 Rubberwood stumpage prices in selected countries in the third quarter of 1992....... 34Table 24 Comparative prices of logs and sawnwood in May 1992........................................... 36Table 25 Comparative prices of logs and sawnwood in November 1996 ................................. 36

Table 26 Prices of Sawnwood in Taiwan province of China in October 1996 ......................... 37Table 27 Consumption of rubberwood in 1991......................................................................... 39Table 28 Use of rubberwood by country and product type in 1991 .......................................... 39Table 29 Estimated rubberwood consumption in 1991 and 1996 ............................................. 40Table 30 Projected total wood production from rubber plantations in Peninsular Malaysia from

1996-2012................................................................................................................... 42

Table 31 Projected log and sawnwood production from rubber plantations in PeninsularMalaysia from 1996-2012 .......................................................................................... 42

Table 32 Outlook for rubberwood availability in Thailand....................................................... 45Table 33 Potentially available rubberwood logs and sawnwood in Indonesia in 1998............. 46Table 34 Supply and demand of rubberwood sawlogs in Malaysia in 1996-2012.................... 47Table 35 Supply and demand of rubberwood chip logs in Malaysia in 1996-2012 .................. 47

Table 36 Outlook for demand for various wood products in Thailand ..................................... 47Table 37 Relative importance of rubberwood in imports of wooden furniture in 1991............ 48Table 38 Japanese imports of wooden furniture by source (Million yen) ................................. 49Table 39 World furniture imports in 1992-1995 ....................................................................... 51Table 40 World furniture exports in 1992-1995........................................................................ 51

Table 41 The sources of European Union furniture imports 1990-1995................................... 52



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INFORMATION NOTE ON ASIA-PACIFIC FORESTRY SECTOR OUTLOOK STUDY

At its sixteenth session held in Yangon, Myanmar, in January 1996, the Asia-Pacific Forestry Commission, which hasmembership open to all governments in the Asia-Pacific region, decided to carry out an outlook study for forestrywith horizon year 2010. The study is being coordinated by FAO through its regional office in Bangkok and itsHeadquarters in Rome, but is being implemented in close partnership with governments, many of which havenominated national focal points.

The scope of the study is to look at the main external and sectoral developments in policies, programmes andinstitutions that will affect the forestry sector and to assess from this the likely direction of its evolution and to presentits likely situation in 2010. The study involves assessment of current status but also of trends from the past and themain forces which are shaping those trends and then builds on this to explore future prospects.

Working papers have been contributed or commissioned on a wide range of topics. They fall under the followingcategories: country profiles, selected in-depth country or sub-regional studies and thematic studies. Working papersare prepared by individual authors or groups of authors on their own professional responsibility; therefore, theopinions expressed in them do not necessarily reflect the views of their employers, the governments of the Asia-Pacific Forestry Commission or of the Food and Agriculture Organization. In preparing the substantive report to bepresented at the next session of the Asia-Pacific Forestry Commission early in 1998, material from these workingpapers will be an important element but will be blended and interpreted alongside a lot of other material.

Working papers are being produced and issued as they arrive. Some effort at uniformity of presentation is beingattempted but the contents are only minimally edited for style or clarity. FAO welcomes from readers any informationwhich they feel would be useful to the study on the subject of any of the working papers or on any other subject thathas importance for the Asia-Pacific forestry sector. Such material can be mailed to the contacts given below fromwhom further copies of these working papers, as well as more information on the Asia-Pacific Forestry Sector Study,can be obtained:

Rome: Ms. Qiang MaForestry Officer (Econometrics)Policy and Planning DivisionForestry DepartmentFood and Agriculture Organization of

the United NationsViale delle Terme di CaracallaRome, 00100, ITALYTel: (39-6) 5225 3506Fax: (39-6) 5225 5514Email: <[email protected]>

Bangkok: Mr. Patrick DurstRegional Forestry Officer

FAO Regional Office for Asia and the Pacific Maliwan Mansion Phra Atit Road Bangkok 10200 THAILAND Tel: (66-2) 281 7844 Fax: (66-2) 2800445 Email: <[email protected]>



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ABBREVIATIONS

ANRPC Association of Natural Rubber Producing CountriesASEAN Association of Southeast Asian NationsFAO Food and Agriculture Organization of the United NationsFELCRA Federal Land Consolidation and Rehabilitation Authority (Malaysia)FELDA Federal Land Development Authority (Malaysia)FRIM Forest Research Institute of MalaysiaIRRDB International Rubber Research and Development BoardIRTF Indian Rubberwood TaskforceIRSG International Rubber Study GroupLTC Timber-latex clonesMDF Medium-density fibreboardMRB Malaysian Rubber BoardORRAF Office of the Rubber Replanting Aid Fund (Thailand)OSB Oriented strand boardRISDARubber Industry Smallholders Development Authority (Malaysia)RRIM Rubber Research Institute of MalaysiaRRIT Rubber Research Institute of Thailand



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EXECUTIVE SUMMARY

The rubber industry was established in South and Southeast Asia at the end of the 19th centuryafter the rubber tree, Hevea brasiliensis, was introduced from its native South America. Rubberplantations around the world presently cover some 9 million ha, with almost 95 percent in Asiaand more than 75 percent in the three largest producer countries Indonesia, Thailand andMalaysia. Further Asia-Pacific producers include China, India, Vietnam and Sri Lanka, whichtogether account for another 18 percent. Increasing tendencies are observed in Indonesia,Thailand, China and Vietnam, while declines are experienced in Malaysia and Sri Lanka.

Rubber trees are generally grown on large estates or in smallholdings, the latter often in rubber-based agroforestry systems. Smallholdings dominate Asia, with shares of 96, 86 and 84 percentin Thailand, Malaysia and Indonesia, respectively. Only in Vietnam, China and Papua NewGuinea do estates account for more than half of the total area. Estate rubber areas have beendeclining throughout the region, a trend that will likely continue in the medium term, largelybecause of the higher profitability of other crops, such as oil palm. Due to its susceptibility toinsect and fungal attacks, rubberwood has to be processed shortly after the trees are cut. Manyexperts have argued that rubberwood cannot be economically produced from remote andfragmented smallholdings, even though smallholder resources are usually included inprojections.

Rubberwood has traditionally been used for fuelwood and charcoal in rubber processing, steelindustries, tobacco curing and brick manufacturing. Most rubberwood has been burned at theclearing site, except in the wood-scarce countries of South Asia. Although there exists a largenumber of rubber tree clones with different properties, they are generally replanted after 25-35,when they yield 100-200 m3 per hectare, the lower ranges being more typical for smallholdings.

Large-scale industrial utilization started with sawnwood production in Malaysia and Thailandduring the 1980s. Malaysia has promoted the development of its downstream rubberwoodindustry with the institution of an export quota and in 1994 a complete ban on sawnwood.Consequently, Malaysia has the most diversified rubberwood industry with various types ofwood-based panel plants and furniture mills.

Ready and low-cost availability, light color, easy machining and staining properties have allcontributed to the establishment of rubberwood as an important wood product. However, residualPCP content limits certain uses in scrupulous markets. Today, aside from the traditional uses,rubberwood is used primarily for furniture, furniture parts and wood-based panels.

Rubberwood stumpage prices have generally been very low or negative when compared to otherwood species, due largely to the fact that rubberwood is an agricultural by-product. Poor qualitylogs, distance to processing facilities, seasonality and rubberwood traders’ opportunism hascontributed to these low prices. The price differential between rubberwood logs/sawnwood andother species is narrower, but the former is still cheaper in many places. However, localizedshortages and variable qualities have translated into considerable price ranges.

Detailed, recent and accurate information about rubberwood utilization is not regularly collected.The most recent comprehensive study was carried out by the International Trade Center in theearly 1990s. Consumption of rubberwood logs in 1991 was estimated to be about 2.5 percent ofAsian tropical log production or 4.6 million m3, most of which was used by sawmills. In 1993,



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the wood-based panels sector used some 1.1 million m3 of rubberwood, in large part because ofthe rapidly growing MDF sector. Thailand, Malaysia and Indonesia in 1994 had a total of 12MDF plants, out of which six were based on rubberwood. Six more were planned for thefollowing three years.

There has been a consensus that rubberwood is under-exploited. Indonesia’s estimated use duringthe early 1990s was a mere 27 percent of its available resource, while Malaysia’s was 62 percentand Thailand’s 83 percent. The rubberwood processing industry has also been suffering from lowrecovery rates (15-35 percent), partly due to the use of poor technology.

In secondary processing, the main use of rubberwood has been in furniture manufacturing,mouldings and joinery. Rubberwood’s physical characteristics mean that it can substitute formany other species, including ramin, meranti, teak oak and pine. Rubberwood furniture exportsaccounted for some 70 percent of the combined Malaysian and Thai furniture exports in 1995.

Annual consumption of rubberwood products (sawnwood and furniture) during the early 1990swas around 240,000 m3 (product volume). It was estimated that this market would grow to350,000 m3 by 1996. Most rubberwood is traded in the form of finished furniture (55 percent)and furniture parts (17 percent). Trade in rubberwood sawnwood was small and mainly confinedto exports to Taiwan Province of China and Japan.

It is very likely that all of the above figures have increased since the early 1990s, although the1997 Asian financial crisis and its aftermath have probably somewhat dampened rubberwood’sadvance. According to various estimates and projections, today’s combined rubberwood logavailability in Indonesia, Thailand and Malaysia alone is more than 6.8 million m3.

Factors contributing to a positive outlook for rubberwood include:

• Rubberwood’s properties, particularly its light color and easy machining will continue tomake it a popular substitute for wood from increasingly scarce natural forest trees. Modernheat/steam/vacuum systems have largely mitigated the problems associated with the wood’latex content.

• Environmental concerns in consumer markets will increasingly shift preferences to woodproducts obtained from plantations. This will give rubberwood an advantage over some of themore traditional tropical woods used in furniture and wood-based panel manufacturing.Recent strides in rubberwood plantation certification confirm this development. On the otherhand, rubberwood has to be able to compete with increasingly abundant softwood plantationspecies, particularly New Zealand pine.

• Where rubber tree planting programs are effective and economically accessible, rubberplantation areas can be maintained, as in Thailand, secure rubberwood supplies can providethe investment security necessary for expanded rubberwood utilization. In Thailand, forinstance, potential sawlog and sawnwood availability is projected to increase from 2.8million m3 to 4.18 million m3 and 0.84 million m3 to 1.25 million m3 from 1997 to 2012,respectively.



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Obstacles to increased rubberwood utilization comprise:

• Rubberwood’s susceptibility to insect and fungal attacks will continue to make iteconomically unviable for the majority of rubber producers. Increased accessibility will onlycome with general socio-economic development, particularly in the transportation sector.

• Trends in the ownership structure indicate that smallholders will produce an increasing shareof rubber. Their difficulties in profitably utilizing rubberwood will likely bring aboutshortages where demand outstrips what estates can supply. In Malaysia, for instance, whereboth estate and smallholding areas have been declining since the 1980s, sawlog availability isexpected to decrease from more than 1.3 million m3 in 2000 to less than 0.5 million m3 in2010 and sawnwood availability from more than 300,000 m3 to just over 100,000 m3. InIndonesia, estate areas have declining as well, but improving current underutilization maycompensate for the smaller volume of mature trees available to 2010.

Localized supply shortages and associated price developments may end rubberwood’scomparative advantage over other wood species. Since rubberwood comes in small sizes, it issuitable for the wood-based panel industry. If Malaysia’s OSB trials become applied at largerscales, for instance, competition for rubberwood between furniture and panel manufacturers maylead to further price hikes.



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1 INTRODUCTION

The Asia-Pacific Region is undergoing a rapid transformation due to fast economic development.There are social and economic changes that exert pressures on the forest resources of the region and,at the same time, some changes are creating new opportunities for forests and trees to contribute todevelopment. In order to assess changes affecting the forest sector, their trends and prospects for thefuture, FAO has proposed an outlook study for the forestry sector to the year 2010. This proposalwas welcomed by the Asia Pacific Forestry Commission at its sixteenth Session in Yangon, January1996. This thematic study forms part of a series and was conducted analyzing all relevant andavailable documents at FAO Headquarters.

The Asia Pacific Forestry Outlook study has the overall function of assessing the status trends andoutlook for the Forestry Sector to 2010. Implementation will involve the collection of specificstudies, which will then be assembled for the final report. This thematic study provides a descriptionof the current consumption, utilization and trade of rubberwood and rubberwood products in mainproducing countries and of the likely market prospects for rubberwood products.



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2 RESOURCE PROPERTIES

The emergence of rubberwood (also referred to as heveawood or parawood) as an internationallyestablished wood product has often been termed a ‘success story.’ Various factors have contributedto this development, first and foremost the fact that rubberwood represents a relatively sustainablealternative to tropical woods extracted from natural forests. Furthermore, rubberwood has proven tobe very versatile in its use in furniture manufacturing and the wood-based panels industry. Whereforests are scarce, particularly in South Asia, the use of rubberwood as fuelwood continues tomitigate pressure on natural forest resources. This section provides an overview of the origin ofrubber trees (hevea brasiliensis) in Asia, their cultivation, the environmental impacts of rubberplantations, rubberwood yields and rubberwood properties.

2.1 Asian origins

Hevea brasiliensis arrived in Asia in 1877 from its native Brazil by way of the British ColonialOffice. Initially, rubber trees were grown experimentally in Sri Lanka, from where they werebrought to Singapore and Malaysia. Much of the pioneering work was carried out at the SingaporeBotanical Garden, where Henry Ridley, the Garden’s director from 1888-1911, discovered asustainable harvesting method to obtain continuous yields over a period of years. By the turn of thecentury, rubber tree production had spread to what was then Indochina (Vietnam and Cambodia),the Dutch East Indies (Indonesia) and Thailand; the British in Malaysia and the Dutch in Indonesiacleared large areas of rainforest to create rubber plantations. Although cultivation at first took placeon plantations, smallholders rapidly adopted hevea as a source of income (Killmann & Long, 2000;International Rubber Research and Development Board (IRRDB, 2000; Goldthorpe, 1993). Today,rubber trees are cultivated in more than 30 countries in Asia, Africa and Latin America.

2.2 Rubber tree cultivation

As a tropical tree, Hevea brasiliensis grows best under conditions of temperatures between 20-28°C, well-balanced annual rainfall of 1,800-2,000 mm and protection from high winds. It developsreasonably well up to 600 meters above sea level (but is capable of growing to at least 1000 metersnear the Equator) and will perform on most adequately drained soils. Its prime growing area isbetween 10° latitude on either side of the equator, although it is also found further north, as inChina, and south (IRRDB, 2000). The current distribution of rubber production is shown in Figure1.

Mature trees on rubber plantations are commonly 20-30 meters tall with a relatively slim trunk of upto 30 cm diameter at breast height, an average branch-free bole of 3 meters and upwards-extendingbranches. Young trees have a smooth brown-green bark. Rubber trees flower once a year. Insectcross-pollination results in large fruits containing several thimble-sized seeds with hard outer coats(in some countries, such as Malaysia, a second round of seed production may occur). If satisfactorilygerminated and planted within 2-3 weeks (at about 500 trees per hectare, although some clones areplanted at much higher densities), seeds grow to produce seedling plants. Depending on conditions,these take 5-10 years to reach 'maturity’, which is defined as the stage when tapping can be started.In practice, this is when the trunk has about 500 mm circumference at 1 meter above ground level.



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Figure 1 World production of natural rubber in 1999

Source: FAOSTAT.

When the rubber plantation industry began in Southeast Asia the main source for propagation wasunselected seeds. It was soon found, however, that using selected seeds from higher yielding treescould lead to appreciably higher yields. This method attained commercial acceptability in the early1920s. Among the many possible vegetative methods of propagation, only bud grafting has beenadopted commercially.

At least once a year the leaves of the tree die and fall off in wintering, after which new leaves areformed. The sixteen-week wintering period greatly affects the tree’s metabolism, latex constitutionand yield, which together with other climatic factors, causes distinct seasonal variations in naturalrubber production, with important repercussions for the primary rubberwood processing industry(IRRDB, 2000).

Tapping of rubber trees starts in the fifth to seventh year after planting and continues for 25 to 30years. The classical method for tapping is the removal at each tapping of only a thin layer of barkfrom the cut end, thus permitting a smooth flow of latex and allowing the bark to regenerate.However, improper tapping in smallholdings often has negative consequences for wood recovery.After 30 years, a decline in latex production renders further tapping of the trees uneconomical,although smallholders may continue for many years. The trees are then removed and replaced withnew seedlings.

The age at which rubber trees are actually replaced can vary considerably, depending on the healthof the tree, prevailing rubber prices and access to replanting funds. Table 12 on page 21 providesinformation on harvesting ages in Thailand.

The rubber plant is infected by many diseases. Some are common to many countries while othersare restricted to a region or only a few countries. A 1998 survey by the International Rubber

South America0.9%

Other Asia5.9%

South Asia10.0%

East & SE Asia77.1%

Africa5.1%

Other1.0%

Other93.0%



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Research and Development Board found the occurrence of 22 severe diseases (Hashim, 1998); thesurvey also noted the emergence of many new diseases since a similar study was carried out eightyears earlier. The most significant are Colletotrichum anthracnose (reported in Indonesia),Colletotrichum leaf fall (China, India, Indonesia, Malaysia and Vietnam), Oidium leaf fall (China,India, Indonesia, Malaysia, Vietnam), Corynespora leaf fall (India, Indonesia, Malaysia, Sri Lanka),Black stripe (China, India, Indonesia, Malaysia, Thailand and Vietnam), Pink disease (India,Indonesia, Malaysia and Vietnam) and white root disease (Indonesia, Malaysia, Sri Lanka,Thailand). In certain countries, Corynespora leaf fall has been considered the most severe disease,causing substantial economic loss. The IRRDB has repeatedly warned producers of this disease andthe risk of outbreaks remaining undetected for a long time.

2.3 Environmental considerations

Rubberwood discussions make frequent reference to the product’s environmental sustainability, dueprimarily to the fact that it is procured as a by-product of a tree plantation crop. In view of thepotential availability of rubberwood from existing plantations (see next section) and the increasingscarcity of tropical woods from natural forests, there is little doubt that rubberwood relievespressure on remaining forest areas.

Agroforestry researchers are also paying increasing attention to the role of smallholder cultivation(sometimes called ‘jungle rubber agroforestry’) as an alternative to certain types of unsustainablefood crop-based shifting cultivation systems. Jungle rubber agroforestry is widely practiced inIndonesia (Sumatra and Kalimantan) and Southern Thailand; similar approaches are beingintroduced in Vietnam and are being considered for Myanmar.

When hevea arrived in Sumatra at the end of the 19th century, farmers and shifting cultivatorsquickly adopted the cultivation of hevea in their fields. Realizing the value, as well as the ease andflexibility of its management, they transformed their fallows to a semi-permanent form ofagroforestry. Following slash and burn of existing vegetation in secondary or primary forests orother land types, rubber trees are planted in between upland rice. Secondary forest species areallowed to regenerate with some selection pressure on type and intensity of species dominance. Thispractice has create complex agroforestry systems yielding diverse harvestable products, includingtimber, fruits, rattan, bamboo, vegetables and medicinal plants in addition to rubber. Rubbercultivation thus assisted the transition from shifting cultivation to a more permanent settled form ofagriculture, which has been recognized as a ‘best bet’ land use system for the humid tropics whenlocal and global impacts are both considered (van Noordwijk et al., 1995; Tomich et al., 2000).

Aside from the role of rubberwood plantations vis-à-vis other land use forms, numerous studieshave been carried out to evaluate the environmental impact of rubber plantations as such. Whilemany of these may exaggerate in their favorable comparison of hevea ecosystems to primary forest,they all present convincing evidence of positive effects.

Research on the ecological impact of rubber plantations on soils degraded by shifting cultivation inNortheast India has demonstrated an improvement of soil properties after the establishment ofHevea. Rubber plantations adopting proper agroforestry management practices (including terracing;silt pitting and bunding; and the growth of leguminous cover plants between the rows to assist withnitrogen fixation) were found to help in the enrichment of organic matter, which consequently



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improved soil physical properties, such as bulk density, soil porosity, moisture retention andinfiltration. An increase in organic matter was also observed. (Krishnakumar et al., 1990).

Similarly, a review of Malaysian research argues that of all the agroforestry cropping systems rubberplantations approximate closest to the rainforest system, in terms of canopy, leaf litter and innutrient cycling (see Figure 2 and Joseph (1991) quoted in Goldthorpe, 1993). Fertilizer inputs areconsidered very low and soil surrounding rubber trees appears to be enriched by abundant leaf fall.

Figure 2 Nutrient removal and yield of different crops

Note: parentheses behind crop names indicate yield in kg/ha. Source: Sethuraj et al (1996).

According to some researchers, the most understated aspect of Hevea cultivation is that of its role asa carbon sink. Physiological studies have shown that Hevea is more effective than teak grown inplantation conditions in taking up carbon dioxide (Sethuraj et al., 1996). This is thought to be due tothe extra energy required to produce the latex inside the tree: in contrast to a synthetic rubber plantwhich consumes energy and produces carbon dioxide to convert pure energy (crude oil) intoelastomers, the natural rubber plant converts carbon dioxide into an elastomer. The leaf area createdby a mature rubber tree is also sizeable: the leaf area index of a mature rubber plantation can be ashigh as six or seven. Because of the high photosynthetic rate and leaf area index, the biomassproduction per unit land area within a given time is very high in Hevea. With a planting density of450 trees per hectare, the canopy closes in less than five years.

Environmental considerations in the context of rubberwood plantations have also attracted theattention of certification/labeling schemes. In 1994, a United Kingdom do-it-yourself retailercontracted SGS Silviconsult and Certification to undertake a Forest Audit of a Malaysian firm’sHevea plantations in Johor (southern tip of Peninsular Malaysia). The audit, the first of its kind onsustainable management of rubber plantations in Malaysia, was carried out using the principles andcriteria for forest management of the European Forest Stewardship Council. While the auditorsrecommended certification, they also found areas in need of improvement, including the storage and

0 50 100 150 200 250

Rubber (1800)

Tea (1300)

Coconut (1400)

Oil palm (2500)

kg/ha

MagnesiumPotassiumPhosphorusNitrogen



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use of herbicides; health, safety and environmental issues at sawmill sites; biodiversityconservation; and the use of pesticides and fertilizers (Chan et al., 1995).

In Indonesia, Forest Stewardship Council/SmartWood certification has been granted to a companysourcing naturally occurring Pulai wood (Alstonia spp.) for its pencil slat processing plant fromrubberwood agroforestry systems in Musi Rawas District, South Sumatra (SmartWood, 2000).

Finally, strides toward certification are also made in Thailand. In 1998, the Ministry of Agricultureannounced that it would apply ISO 14000 environmental standards to all farm products, startingwith rubberwood, one of the country’s top five exports. The Ministry expected at least 30 percent ofall rubberwood would be certified by 2001 (Bangkok Post, 1998).

2.4 Rubberwood yield

Rubberwood yields per tree vary according to clone, site conditions and management. The globalrubberwood study carried out by Indufor under the auspices of the International Trade Centreestimated yield at 140 to 200 m3/ha, with the higher ranges observed in countries where plantationsare carefully managed, i.e. Malaysia, Thailand, India and Sri Lanka (Indufor, 1993).

A 1995 study on using Malaysian rubber plantations as timber resources used as the following as abasis for its calculations (Arshad et al., 1996):

Greenwood production up to 8 cm diameter 0.8 m3/treeSurviving tree stand – estate 240 trees/haSurviving tree stand – smallholding 228 trees/haLength of logs extracted 1.8 mReplanting cycle 25 yearsSawnwood recovery – estates 32 percentSawnwood recovery – smallholders 20 percent

Accordingly, estates and smallholdings can yield 190 and 180 m3 of greenwood per hectare,respectively. In the case of usable logs, estates recuperate about 57 m3 and smallholdings about 54m3 per hectare. After sawing, the estates and smallholdings produce about 18.1 m3 and 10.8 m3 ofsawnwood, respectively.

In another study, gross yield in 1994 for estates in Peninsular Malaysia was quoted at 180 m3/ha,which included branches greater than 5 cm diameter. In smallholdings, where trees are generally ofpoorer form, average yields were found as low as 100 m3/ha (Khoo et al. (1987) quoted in Ismariah& Norini, 1994). Net volumes suitable for sawnwood processing were 20% and 15% of totalvolumes for estates and smallholdings, respectively.

Research on the development of more productive varieties (clones) has been carried out in a only afew countries, where trials for identifying clones as suitable for large-scale introduction often lastten to fifteen years. In 1998, for instance, Malaysia launched latex-timber clones that can producetimber in a shorter period of time compared to other tropical species and can be densely planted.The clones RRIM 2023, 2024, 2025 and 2026 have been reported capable of producing 0.81 to 1.87m3 of wood per tree, significantly higher than the 0.68 to 1.33 m3 of the earlier 2000 series clones



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(Malaysian Timber Bulletin, 1998). Some more detailed statistics on rubberwood yield in Malaysiaare also presented in Table 1

In 1992, Ramli Othman reported that some of the Hevea spp. found in South America are potentialrubber trees for timber production. The species are H. guianensis, H. nitida, H. pauciflora and H.benthamiana. These species are known to have high diameter and height growth with reasonablygood stem straightness. Efforts were initiated to import the materials for trial and testing.

Table 1 Usable and available trunk volume/ha from nine Hevea cultivars before felling

Measurements (cm) taken fromstanding trees before felling

Estimated ValuesCultivars Stand(trees/

ha)

Treessampled

Dia. at 0.6m from the

ground

Dia. at 1.8m from the

ground

Clear boleheight*

Mean usabletrunk

m3/tree**

AvailableTrunk

m3/Ha***PBFP Seedlings 207 157 42.7 (9.3) 30.3 (7.6) 583.3 (292.6) 0.629 (0.48) 130Tjir 1 Seedlings 252 300 39.2 (8.3) 31.8 (8.0) 426.1 (169.5) 0.432 (0.25) 109RRIM 623 234 47 40.6 (9.9) 37.5 (9.0) 413.0 (146.6) 0.530 (0.42) 124RRIM 605 255 103 31.1 (6.5) 29.2 (6.0) 356.3 (14.5) 0.251 (0.12) 64RRIM 603 242 90 33.3 (8.5) 30.8 (7.2) 344.3 (50.9) 0.278 (0.13) 67RRIM 607 242 93 40.3 (11.3) 37.0 (10.7) 555.5 (161.1) 0.670 (0.47) 162RRIM 501 265 30 32.5 (3.4) 28.7 (3.4) 280.0 (89.3) 0.196 (0.06) 52GT 1 259 103 38.4 (7.1) 32.8 (7.6) 481.2 (113.1) 0.477 (0.24) 124PB 5/51 230 164 32.3 (5.0) 27.4 (4.8) 418.3 (130.9) 0.281 (0.11) 65* Measured from ground level to the first branch from the ground.** Estimated by πr2I, where π = 3.142, r = mean of tree radius (diameter - 2) at 0.6 and 1.8 m, I = clear bole

height.*** Estimated from mean trunk volume/tree x stand.Figures in parenthesis are standard deviations. Source: S. K. Khoo, 1993.

2.5 Rubberwood properties

The natural color of rubberwood is one of the principal reasons for its popularity. The air-drydensity is between 560-640 kg/m3 and it has good overall woodworking and machining qualities forsawing, boring, turning, nailing and gluing. It also takes finishes and stains well. Its strength andmechanical properties are comparable to traditional timbers used for furniture making andwoodworking. However, there are more than 20 clones of rubber trees used in commercialplantations and some of the variations between clones are reflected in wood characteristics.

Rubberwood can substitute for several timber species that are essential for the primary andsecondary industries in tropical and sub-tropical countries. They include the following species:ramin, meranti, sersaya, merbau, kapur, tangile and teak. A comparison with other species is shownin Table 2. In appearance, it can substitute for well-known African species (sapelli, iroko, andkosipo), South American species (imbuia) and heavily traded Asian species (ramin, meranti,mersawa, seraya, merbau, kapur, tangile, and teak). In Japan, rubberwood is increasingly used toreplace more traditional timbers such as buna (Fagus spp) and nara (Quercus serrata).

Rubberwood is easy to saw and causes no significant blunting of the saw teeth. The presence oflatex in rubberwood tends to clog the saw teeth, which can be reduced by using router bits withlarger than standard clearance angles. Rubberwood slices or peels well when converted into veneer.



9

Rubberwood can be turned without burn marks or tear outs on standard lathes and the wood is easyto drill or bore. There are two common methods used for the primary breakdown of rubberwoodlogs. One is to break the logs into two halves, each of which is then converted into sawnwood. Theother method is to cut a slab from one side of the log, then turn it 90 degrees to cut the sawnwood.

Table 2 Strength properties of (air-dried) rubberwood and other species

Static BendingSpecies

Air-drydensity(kg/m3)

MOR(N/mm2)

MOE(N/mm2)

CPaG(N/mm2)

CPeG(N/mm2)

SideHardness

Shearing strengthparallel to grain

(N/mm2)Rubberwood (Heveabrasiliensis) 650 66 9,240 32.2 4.69 4,350 11.0

Dark red meranti (Shoreaplatyclados) 610 77 12,100 39.6 4.14 3,650 8.7

Light red meranti (Shorealeprosula) 575 75 13,600 41.4 2.51 2,940 6.8

Sepetir (Sindora coriacea) 690 92 13,600 46.3 5.93 5,210 13.6Nyatoh (Palaquium gutta) 675 79 12,200 44.5 - 5,430 11.0Ramin (Gonystylus bancanus) 675 88 15,900 48.8 - 4,580 8.5

MOR: Modulus of rupture; MOE: Modulus of Elasticity; CPaG: Compression parallel to grain; CPeG: Compressionperpendicular to grain (stress at limit of proportionality); Side hardness: load to embed 0.0113 diameter steel sphere tohalf its diameter, N. Source: Lee et al. (1965) quoted in Hong, 1995

While rubberwood exhibits a number of physical weaknesses, many have been overcome throughtechnological advances in processing. Where rubberwood makes a significant economiccontribution, research institutions continue their search for feasible remedies. Below is a list ofcommonly known deficiencies and associated treatments:

� Non-durability, i.e. the susceptibility to insects and fungi attacks. This is by far the mostemphasized weakness of rubber trees, caused by the high starch content that attracts a range ofinsects and fungal diseases, especially blue stain. Logs must be milled within a few hours offelling. Sawnwood cannot be air dried but is kiln dried immediately after sawing, when it has amoisture content of about 60 percent. Pentachlorophenate (PCP) compounds and copper-chrome-arsenic (CCA) compositions are used to treat the wood, but many mills prefer to useboron-based preservatives to avoid restrictions on PCP and CCA in the USA, Japan and Europe.

� Smaller sizes compared to other leading timber species. Commonly harvested commercialsizes of rubberwood rarely exceed 50 mm in thickness and 1800 mm in length (Kollert, 1994).This problem is usually avoided by laminating or finger-jointing techniques, as in manufacturingtable-tops.

� Seasoning physical defects, such as cupping, twisting, bowing and checking. Cutting thetimber into short lengths of 0.3-1.2 meters and narrow widths reduces the effects of twist, whilefinger jointing or laminating is used to obtain larger pieces.

� Clogging of saw teeth caused by remaining latex.

� Low conversion rate. This is generally compensated by the relatively low cost of rubberwoodlogs.

� Low productivity rate, particularly in regards to smallholders of rubber plantations.Where proximity allows, extension agents introduce high-yielding clones and assist inimproving tapping methods.



10

Although it is considered a perfect plan to manage the rubber tree for both latex and rubberwood,such perfection rarely exists because under normal circumstances tapping rubber tree for latexaffects plant growth significantly (Kollert, 1994). Hence, a focus on either one of them is consideredto be prudent.



11

3 RESOURCE AVAILABILITY

3.1 Rubber plantations

Today, rubber plantations are found in several countries in the tropics, from its native habitat in theAmazon Basin to Guatemala and Mexico in the Americas; Nigeria, Liberia, Cameroon and Côted’Ivoire in West Africa; and continental and insular Southeast Asia and the Indian sub-continent,where they are significant (see Table 3).

In Southeast Asia, Indonesia, Malaysia, and Thailand rank first among the world’s rubbercultivators and rubberwood producers. According to various estimates, they contain more than 90%of the world total (Table 3). Other countries in Asia with relatively minor rubber plantations areChina, Vietnam, India, Sri Lanka, Philippines, Myanmar and Cambodia. In comparison, rubberplantations outside Asia are insignificant, including in its native homeland, the Amazon Basin. Agrowing trend is observed in Africa, however, particularly in Côte d’Ivoire.

Table 3 Rubber plantation area of major producing countries in 1999

Geographical region Area (‘000 ha) Share of world total (%)Indonesia* 2,269 31.6Malaysia** 1,420 19.8Thailand*** 1,555 21.6China**** 390Vietnam 380India***** 374Sri Lanka 158Philippines 98Myanmar 48Cambodia 39Asia 6731 93.7Liberia 28Nigeria 225Cameroon 53Côte d’Ivoire 60Africa 366 5.1Guatemala 27Brazil 59Americas 86 1.2World****** 7,183 100

*Elsewhere, Indonesia’s plantation area is estimated at 3.5 million ha (Indonesian Rubber Association); the Associationof Natural Rubber Producing Countries (ANRPC) reported a figure of 3.399 million ha for 1998; Indufor in 1993estimated Indonesia’s rubber plantation area at 3.04 million ha.**Malaysia’s plantation area has been reported as low as 1.1 million ha (Bangkok Post, March 27, 2000).***Thailand’s 1996-97 plantation areas was estimated as high as 1.965 million ha (Thai Rubber Research Institute,quoted in Promdej, 1997).****China’s 1992 rubber tree plantation area was estimated at 616,000 ha, which would mean a 36 percent decreaseover 7 years to the current 390,000 ha reported by FAO.*****India’s 1996-97 plantation area was elsewhere estimated between 533,000 ha (Mathew, 1998) and 597,000 ha(ITTO, 1998).******The less conservative estimates reported in these footnotes would bring the world total to roughly 9 million ha.Source: FAO, 1999.



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Until the late 1980’s, Malaysia was the world leader in rubber plantations. Although a number ofrelated factors have since relegated Malaysia to third place, the country remains an importantproducer of rubber and leader in rubberwood and trade (see Table 4).

Table 4 Rubberwood production trend in the three top countries

Year Indonesia Malaysia Thailand(‘000 ha) (% share) (‘000 ha) (% share) (‘000 ha) (% share)

1981 1564 35 1620 36 1269 281991 1878 38 1610 33 1420 291999 2269 43 1420 27 1555 30

Source: Killmann and Hong, 2000

Figure 3 and Figure 4 show the trends in rubber plantation harvesting in Asia-Pacific producercountries during the 1990s. Note that the alternative figures indicated in the footnote of Table 3would lead to somewhat different figures (assuming that the figures FAO reports refer in fact tototal plantation areas). The main variation would be a less pronounced increase in Indonesia, aquicker expansion in Thailand and a more accelerated decline in Malaysia. India and China wouldhave larger areas today, but the trend would be unclear.

The following sections provide a more detailed overview of rubber plantations in some of the Asia-Pacific region’s leading producer countries.

Figure 3 Rubber plantation harvesting in major Asia-Pacific producer countries in 1990-1999

Source: FAOSTAT.

1.2

1.4

1.6

1.8

2

2.2

2.4

1990 1992 1994 1996 1998

IndonesiaMalaysiaThailand



13

Figure 4 Rubber plantation harvesting in minor Asia-Pacific producer countries in 1990-1999

Source: FAOSTAT.

3.1.1 Indonesia

The overwhelming majority of Indonesia’s rubber plantations are located in Sumatra andKalimantan (Indonesian side of Borneo), but land cover under rubber is expanding rapidly on otherislands as well. Sumatra accounts for about 40 percent of Indonesia's annual rubber output of about1.5 million tonnes (Reuters, July 7, 2000). Natural rubber is one of the more important commoditiesin Indonesia, a source of both foreign exchange and cash income for more than twelve millionpeople who depend on the rubber industry for their livelihood, including an estimated 1.3 millionfarming households which rely directly on rubber production. Since rubber planters in Indonesia arepredominately smallholders (84 percent), the quality and quantity of Indonesian rubberwooddepends mainly on their production conditions.

Smallholder rubber production systems in Indonesia exist within a wide range of managementintensities. Only about 15 percent the smallholder rubber farmers have been reached bydevelopment projects and they have adopted estate plantation systems with high input/outputcharacteristics. Monocultural plantations with clonally propagated germplasm of high latexproductivity are a norm in these areas. However, the majority of the area is (still) under a ‘junglerubber’ agroforestry system comprised of mixtures of rubber with native tree flora at varyingdensities. Nearly all shifting cultivation in Sumatra’s peneplains has been replaced by rubber-basedagroforestry, which now constitutes the predominant land use system (Budiman et al., 1994).

0

0.1

0.2

0.3

0.4

0.5

1990 1992 1994 1996 1998

Cambodia

China

India

Myanmar

PNG

Philippines

Sri Lanka

Viet Nam



14

Average smallholder rubber production is very low, primarily because most farmers use traditionaltechnology, unselected seedlings, no soil conservation, low fertilizer input, low plant maintenance,high planting density (more than 500 trees/ha) and over-tapping; and because of the low fertility ofthe red-yellow podzolic (ultisol) land used for rubber development. No information on replanting,whether on estates or on smallholdings has been found.

The Asian financial crisis has had a significant impact on Indonesia’s rubber industry. On the onehand, falling rubber prices have forced many tappers to increase tapping frequency, sometimes totwice a day, to obtain more latex, which temporarily increases production but damages theplantation in the long-run. On the other hand, many tappers have looked for jobs elsewhere orswitched to oil palm, leading to supply shortages in North Sumatra (where violence compounds thecurrent difficulties), South Sumatra and Jambi.

Furthermore, reported escalations in plantation looting have led to soaring production costs asoperators have had to hire armed security guards (Reuters, July 7, 2000). By some estimates, lootingin 1999 affected some two million ha of private and state-owned oil palm, rubber and coffeeplantations, causing losses totaling billions of rupiah and threatening investment and privatisationplans (Nirang, 2000). This problem is exacerbated by land disputes in which plantation companieshave been accused of failing to pay compensation for properties that villagers claim belonged totheir ancestors. As Indonesia moves to a more open political climate following the ousting of theSoeharto regime in May 1998, demands have grown for compensating past seizures of land byplantation and mining companies.

3.1.2 Malaysia

In contrast to Indonesia, Malaysia’s rubber plantation area has decreased throughout the 1990s. Atthe beginning of the decade, the country had about 1.84 million ha of rubber plantations of which1.5 million ha were in Peninsular Malaysia (mostly Kedah, Johor, Malacca and Negeri Sembilan),208,000 ha in Sarawak and 80,000 ha in Sabah. According to FAO, the area declined to 1.42 millionha in 1999 (see Table 5). In March 2000, Malaysia’s Minister of Primary Industries voiced a moreconservative estimate when he announced that land use for rubber plantations had dropped to 1.1million hectares (Bangkok Post, March 27, 2000). At the same time, however, the economicimportance of rubberwood products, particularly furniture and furniture parts, has increasedtremendously.

This decline occurred despite the country’s awareness of the socio-economic role of rubber andrubberwood and the latter’s environmental importance. In fact Malaysia continues its efforts inrubber research and development and considers the decrease in rubber production more critical thanever, given the global appeal of rubberwood products, particularly furniture. Factors that led to thedecreasing acreage of the rubber plantations include labor shortage and conversion to other crops,particularly oil palm.

Prior to the 1997 economic crisis, Malaysia shared the strong economic growth that occurred in theASEAN region as whole. This not only acted as a “push” factor for rural-urban migration, but alsoincreased job opportunities in other sectors. Rural-urban migration and the increased standard ofliving contributed to the reduction of the labor potential that would have been available to undertakerubber plantations. As shown in Table 5, Malaysia’s rubber plantation areas decreased by 20 percent



15

in the period between 1990 to 1999. The relative decreases for estates and smallholdings were 45and 14 percent, respectively.

Table 5 Trend in Malaysia’s rubber plantations 1990-1999

YearEstates

(‘000 ha)Smallholdings

(‘000 ha)Total

(‘000 ha)1990 348.75 1,487.96 1,836.711991 333.41 1,485.33 1,818.741992 314.13 1,478.22 1,792.351993 292.52 1,470.00 1,762.521994 274.98 1,462.90 1,737.881995 255.69 1,433.11 1,688.801996 223.95 1,420.43 1,644.38

1997* 200.70 1,415.80 1,616.501998* 183.01 1,372.68 1,555.691999* 191.60 1,273.20 1,464.80

*Preliminary estimates. Source: Malaysian Timber Council, 1998

With rubberwood furniture and panels becoming significant export commodities, the governmenthas made an effort to maintain rubber replanting. During the mid-1990s, replanting rates rangedfrom 30,000-40,000 ha per year, although with a decreasing trend. In 1996 the Rubber IndustrySmallholder Development Association (RISDA) also began to promote higher productivity levelswith its "Minus One Plus Two" concept, whereby replanting densities were to be increased to 800from the usual 400-450 per hectare (Malaysian Timber Bulletin, 1996). However, in 1999 RISDAreported that only 7,500 ha had been replanted in 1998, down from 11,500 ha in 1997 (Ghazali,1999). In 1999, the Minister of Primary Industries announced a target of annual replanting withlatex timber clones (LTCs; harvestable in 12-15 years) of 30,000 ha.

The need to draw up a definite replanting policy for the smallholder sector has repeatedly beenhighlighted. Difficulties in replanting are said to be worsened by the prevalence of small-sized plotsand affected by the drop in replanting funds, the diversion of part of these funds for replanting withoil palm and the removal of government top-up resources. There is also a consensus amongdomestic critics that the implementing agency selected to administer replanting funds should be onethat is fully committed to the future of rubber and accepts the principle that it should be the anchorcrop. Some also want the rubber industry to be under the purview of just one ministry and not bespread over three different ministries as is the case now.



16

Figure 5 shows the age distribution of estate and smallholder rubber plantations in Malaysia. Ofparticular importance in the context of rubberwood is the variability of replanting and new planting,since this will translate into variable availability at maturity (see Section 5). The Figure alsoconfirms the declining trend in replanting and/or new replanting. While the early 1990s experiencedlevels around 50,000 ha, information quoted above has seen levels during the late 1990s as low as7,500 ha, casting doubt on whether the government’s ambitious plans can be realized.

Figure 5 Age distribution of rubber plantations in Peninsular Malaysia in 1993

0

10000

20000

30000

40000

50000

1 5 9 13 17 21 25 29Age

Smallholdings Estates

Source: FELDA, FELCRA, RISDA and Department of Statistics, quoted in Ismariah & Norini (1994).

3.1.3 Thailand

Rubber was introduced in Thailand as an exotic in 1911 from Malaysia. In 1996-97, about1.965 million ha of rubber plantations were estimated to be in existence, with 0.105 million ha or5.3 percent on estates and 1.86 million ha or 94.7 percent in smallholdings. The average size of theapproximately 820,000 small production units is 2.4 hectares (Thai Rubber Research Institute,quoted in Promdej, 1997). However, Asian Timber in 1996 argues that the actual area is by 320,000-480,000 ha larger because there are unrecorded plantations on illegally cleared forest areas.Geographically, 1.705 million ha in the southern peninsula, 0.191 million ha in the southeast, and0.069 million ha in the Northeast. The average annual rubber plantation area which has been felledand replanted through the Organization of Rubber Replanting Aid Fund Board (ORRAF) is36,065 ha per annum.

Natural rubber production and plantation areas have been increasing substantially, assisted by anaccelerated rubber replanting subsidy scheme introduced in the late 1970s. At present, however,rubber production in the southern peninsula and southeast of the country is considered almostsaturated, evidenced by diversification into other crops due to labor shortages or loss of income(Tables 15). It has even been argued that rubberwood production may become more economic thanlatex production in the near future in Thailand (Paechana & Sinthurahat, 1997).

On the other hand, the country’s northeast has the potential to become a new base for rubberproduction as land and labor are still plentiful. Changes in the production base and system from the



17

Southern peninsula to the Northeast are already planned and work on improving planting materialsfor both economically high yield of latex and volume of timber is being accelerated. Aside frommitigating the saturation in traditional planting areas, this shift to the northeast also aims atstrengthening rubber farmers’ livelihood security; providing employment and thereby avoidingrural-urban migration to Bangkok and other large cities; and improving the environment (Promdej,1997).

Table 6 New planting and replanting of rubber in Thailand in 1992-1996

Year New Planting(‘000 ha)

Replanting(‘000 ha)

Total(‘000 ha)

1992 7.65 35.88 43.531993 7.64 39.47 47.111994 8.53 38.40 46.931995 11.76 29.33 41.091996 7.61 35.73 43.34Total 43.10 178.81 222.00

Average 8.64 35.76 44.40Source: Promdej (1997).

An example of the government’s efforts to improve the living standards of rubber farmers andmitigate environmental impacts, not only in the Northeast, is the Rubber Intercropping ResearchProject set up by the Rubber Replanting Fund. Under this project, replanting loans are granted evenwhen intercropping is practised. Intercrops include longgong, mangosteen, neem, satow, bamboo,jampada, riang, durian. So far, the lessons learned from diversifying rubbertree-based agroforestrysystems include that agroforestry techniques are more labour intensive and therefore face difficultiesin family-run plantations (Juriprik, 1996).

In spite (or as a result) of the tenuous situation in which many of Thailand’s rubber farmers operate,smallholders are reported to be “reasonably well organized” (Indufor, 1993). Furthermore, rubberplantations are reported to be well managed and the potential for rubberwood production to beincreasing. Tables 6 and 10 (see below) show that combined replanting and new plantings haveaveraged above 42,000 ha during the period 1990-1996. Compared to other Asian producers, thesefigures also reveal an above-average rubberwood yield of 207 m3 per ha.

3.1.4 India

Whereas most of the major rubber producing countries, except China, experience moderate and welldistributed rainfall, the rubber growing regions of India are characterized by excessive and highlyseasonal rainfall. This produces a longer gestation period, loss of tapping days, fungal diseases andescalating cultivation and production costs. In addition, labor productivity is considered lower thanin the major producing nations. In Thailand, Indonesia and Malaysia, Indian rubber executives pointout, higher labor output coupled with more assistance from the government have kept the cost ofproduction at lower levels (Nair, 1999).

In 1996-97, India’s rubber plantation area was estimated at between 533,000 ha (Mathew, 1998) and597,000 ha (ITTO, 1998), with 95 percent located in the state of Kerala. Out of the 533,000 haquoted by Mathew, 365,500 ha are estimated to be under tapping. Rubber cultivation in India is



18

overwhelmingly smallholder-oriented. There are about 911,000 smallholdings, having a total shareof 86 per cent in area and production. The trend in the rubber plantation area in India is shown inTable 7 below.

Table 7 Rubber plantation areas in India in 1990-97

Year Area (‘000 ha)1990-91 4751991-92 4891992-93 4991993-94 5081994-95 5161995-96 5231996-97 533

Source: Mathew (1998).

3.1.5 China

Rubber plantations in China are found primarily on Hainan Island, Xishuangbana (YunnanProvince) and the western part of Guangdong Province. In 1992, the total area was reported at616,000 ha, ranking fourth in the world (ITTO (1995) – see Table 8).

Table 8 Rubberwood plantations in China - 1992 (‘000 ha)

Plantingcondition

Hainan Yunnan Guangdong Total

Total area 374.2 156.5 88.1 616.0Total area* 248.6 73.0 65.4 401.3Planting time 1950-early 1960s 1958-early 1970s 1950-1970Species PB 846, PR107,

GTI, RRIM600**RRIM600, GF-1,PRL-10, PP-86

*by agricultural reclamation system**also a small number of Haiken No.1 and Haiken No.2Source: ITTO, 1995.

Differences in geography and climate have a strong influence on the occurrence of mold and bluestain infection. In Hainan and Guangdong, where moist and wet climates prevail, mold and staininfection of rubberwood is serious; in Yunnan Province, where the climate is dry or arid, mold andstain infection is light.

The planting area of the agricultural reclamation system was 248,600 ha, accounting for 67 percentof Hainan Island. Assuming a reported replanting period of 30 years in Hainan, 8,000 ha weretherefore supposed to be cut annually. Due to temporary rubber price increases in the years prior to1992, however, Hainan’s replanting was only 3,300-4,000 ha. In Yunnan, the average annualreplanting area according to the agricultural reclamation system was only about 600 ha (ITTO,1995).



19

Under the Hainan agricultural reclamation system replanting began in 1982 and had reached a peakby 1995. Yunnan’s replanting peak should be around the year 2000 for its later plantations. InGuangdong Province, replanting had almost ceased and other tropical plants were planted instead.

3.2 Rubberwood production

Due to the relatively recent emergence of rubberwood as an important wood product in its ownright, little comprehensive information for rubberwood production is regularly collected andavailable. The results of a 1993 in-depth study by Indufor are shown in Table 9.

Table 9 World rubberwood log production in 1991

Country Rubberwood production (‘000 m3)Thailand 1,638Malaysia 1,350Indonesia 270India 666P.R. China 308Sri-Lanka 170Vietnam 150Guatemala 2Total 4,554

Source: Indufor (1993).

More recent rubberwood production data for selected countries is given in the sections below.

3.2.1 Malaysia

The success of rubberwood in Malaysia sometimes appears to be belied by available data. Theseeming paradox of declining plantation areas and increased rubberwood utilization can easily beexplained by higher utilization rates and the very fact that disappearing rubber trees have to beconverted into something if not burned or left to rot. On the other hand, declining rubberwoodproduction as reported by the Malaysian Timber Council (see Table 10) is more difficult to accountfor. One possible elucidation is the way in which data for rubberwood production is actuallyderived. Whether it is deduced from available areas, replanting rates and yield estimates is adifferent story from what is accounted for as being consumed by the primary processing industry(the difference presumably made up by fuelwood).

Accordingly, annual rubberwood production in 1999 was reported to be in the region of 800,000 m3

and the current stock 140,000 m3 (New Straits Times, 1999). One year earlier, annual availability ofrubberwood logs in Peninsular Malaysia was argued to average 3 million m3 while consumptionwas estimated to be about one-third of this figure. In 1995, rubberwood utilization in PeninsularMalaysia was estimated at about 2 million m3, while the availability was estimated at about 3.2million m3 and the estimated annual volume available up to the year 2005 at 8-10 million m3 (AsianTimber, 1995).

Table 10 Malaysia’s planted acreage of natural rubber and rubberwood log production



20

Year Planted area (‘000 ha) Rubberwood log production (‘000 m3)1990 1836 9711991 1818 1,6221992 1792 1,8371993 1762 1,0751994 1737 1,1571995 1688 8811996 1644 284

Source: Malaysian Timber Council (1998).

By way of verification, Figure 5 can be used to give an indication of trends in availability ofrubberwood. Using the assumptions outlined by bin Arshad et al. (1996; see Section 2.3), theavailability of rubberwood logs in 1999 from estates alone would be 804,000 m3. Even if only athird of smallholder rubberwood is added (due to difficult access), the total figure would come to1.4 million m3. Therefore, the figures reported by the Malaysian Timber Council in Table 10 arelikely to be an underestimation.

3.2.2 Thailand

In Thailand, sound management practices, effective smallholder organization and higher utilizationrates have consistently translated into higher rubberwood production figures, even if these havearguably not translated into as much value-added as in Malaysia. By some estimates, Thailandaccounts for 30 percent of world rubberwood production.

Figure 6 Wood quantity exploited from old rubber trees in Thailand in 1986-1996

Source: Office of the Rubber Replanting Aid Fund; figures for 1992-1996 are estimates.

Table 11 and Figure 6 show data on the country’s rubberwood exploitation. Note that the volumesgiven refer to available greenwood. While Urappepatanapong (1989) found that roughly 58 percentof available rubberwood in 1987 was leftover and burnt at the plantation sites, the utilization ratehas since increased considerably. The 1993 Indufor study reported that Thailand utilized 83 percentof the economically available resource (80 percent of total rubberwood availability), translating intoan effective utilization rate of 66.4 percent. With the increased popularity of and demand forrubberwood products, this rate has most likely risen somewhat higher since then. Note also that the

7

8

9

10

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996



21

data in Table 11 indicates an almost 10 percent higher yield than reported for Peninsular Malaysia,namely 207 m3/ha compared to 190m3 (estates) and 180 m3/ha (smallholdings).

Table 11 Rubberwood exploitation in Thailand, 1986-1996

Year Eastern provinces Southern provinces Total (m3)Area

(‘000 ha)Volume

(‘000 m3)Area

(‘000 ha)Volume

(‘000 m3)Area

(‘000 ha)Volume

(‘000 m3)1986 3.3 677.5 40.1 8,330.6 43.4 9,008.11987 2.7 568.4 38.9 8,074.1 41.6 8,642.51988 2.4 506.0 41.5 8,628.3 44.0 9,134.31989 1.8 356.6 33.8 7,020.5 35.6 7,377.11990 1.0 207.9 33.5 6,955.6 34.5 7,163.51991 2.0 420.6 36.8 7,641.8 38.8 8,062.4

1992* 2.9 605.0 45.1 9,372.7 48.0 9,977.71993* 3.2 672.7 40.9 8,494.3 44.1 9,167.01994* 3.2 672.7 40.8 8,484.6 44.1 9,157.41995* 3.2 672.7 39.6 8,230.4 42.9 8,903.11996* 3.3 682.7 40.1 8,331.8 43.4 9,014.5

*Estimates. Source: Office of the Rubber Replanting Aid Fund.

The age at which rubber trees are felled in Thailand shows extreme variation (see Table 12). In thetop five rubberwood producing provinces (accounting for 69% of total production, the share of treesharvested after more than 25 years ranges from 40 to 95 percent, while that of trees between 20 and24 years old ranged from 5 to 53 percent. This variance indicates the flexibility rubber tree growerscan apply in controlling rubber and rubberwood supply.

Table 12 Age distribution of rubber trees felled in Thailand in 1996

Range of age (years)Province<15(%)

15-19(%)

20-24(%)

>25(%)

Nakhonsi Thammarat 0.08 12.07 42.00 45.86Songkhla 0.03 2.96 13.39 83.62Yala - 0.94 9.30 89.76Narathiwat - 0.19 5.11 94.69Surat Thani 0.18 7.32 52.76 39.75Average 0.06 4.70 24.51 70.74

Source: Paechana & Sinthurahat (1997).

3.2.3 India

A market survey done by an Indian consulting firm in 1998 estimated solid rubberwood availabilityin India at 1-1.5 million m3 and processing capacity at 100,000 m3. According to the Chairman ofthe Indian Rubberwood Taskforce (IRTF), only 8 percent of available resources are used forproduction.



22

As indicated in earlier sections, the key point to be noted from the above rubberwood productiondata is that the currently existing rubber plantation areas harbor the potential for significantly greaterrubberwood production, even in countries where rubberwood utilization is already quite high.Whether higher levels of utilization will actually be achieved will not only depend on access tosome of the more remote resources, but arguably more importantly on:

1. the evolution of demand for rubberwood products and the extent to which rubberplantations can keep the attention of estate and smallholder operators; and

2. government efforts to lend support replanting schemes for smallholders.

Some of these dynamics will be examined more closely in the later outlook section.

3.3 Ownership

Rubber plantations are owned or managed by various groups with different interests. In general,there are two main groups of landowners: smallholders and estates. In the three Southeast Asiancountries, where rubber plantations are dominant, smallholders hold the majority of rubberplantation areas, with 96, 86 and 84 percent in Thailand, Malaysia and Indonesia, respectively (seeTable 13). In the top 10 rubber planting countries only China and Vietnam have higher estateownership, with 64 and 87 percent, respectively. In terms of size, smallholders’ plots vary from 2.5to 5 ha, while estates are generally large plantations managed by commercial enterprises or state-owned enterprises.

Table 13 Proportion of rubber plantations owned by estate and smallholders in selected rubberproducing countries in 1998

Country Estates Smallholdings(%) (%)

Thailand 4.3 95.7Malaysia 13.7 86.3India 13.8 86.2Indonesia 16.2 83.8Nigeria 18.7 81.3Brazil 30.1 69.9Myanmar 42.1 57.9Sri Lanka 43.6 56.4Papua New Guinea 54.6 45.4Cote d’Ivoire 59.5 40.5China 63.5 36.5Vietnam 87.2 12.8

Source: Rubber Research Institute of Thailand.

Rubber production on estates tends to achieve higher yields than those observed in smallholdings. Inmany cases, the quality of rubber is also higher. In many countries estates have a major problem inattracting labor for tapping and means are required to make this task less demanding, moreattractive and more productive. Traditionally, estates furnish communities with a wide range of



23

services, including low cost housing, educational and medical facilities, shops and even religiousestablishments.

The dominance of smallholders in the ownership of rubber plantations raises a number ofconcerns/challenges, which affect the quality and quantity of rubberwood and consequentlyhousehold income and socio-economic contributions to the national economy. Smallholders aredependent on the use of traditional rubber management systems characterized by unselectedseedling, high density planting and over-tapping. As a result, smallholders are often unable to satisfythe growing demand for rubberwood and continue to suffer from relatively low standards of living.

3.3.1 Indonesia

Smallholder rubber covers 83.8 percent of the total Indonesian rubber area and contributes 74percent of the country’s total rubber production. So far, only 15 percent of rubber smallholders havebeen reached by the government’s smallholder development project. Beside that, between 10 and 20percent of non-project rubber farmers living close to the projects are estimated to have gained anindirect profit in terms of technical information and improved planting materials. Ongoinggovernment projects provide a mix of credit and cultivation technology, primarily with the aim toconsolidate 'jungle rubber' production systems into larger planting units, to improve managementpractices and increase productivity (Budiman, 1996).

Table 14 Average annual income (per hectare) of farmers with jungle rubber and clonalrubber in Indonesia in 1999

Type of Plantation Yield(kg/ha

of dry rubber)*

Grossincome

(Rp/ha)**

Costs(Rp/ha; includingamortization of

initial costs)

Net Income(Rp/ha)

Number of haneeded tosustain a

householdOld jungle rubber (above 30 years) 400 1,200,000 50,000 1,150,000 3.8Jungle rubber 600 1,800,000 100,000 1,700,000 2.6Clonal seedlings plantation 750 2,225,000 225,000 2,000,000 2.2Young clonal plantation (7- 10 years) 1000 3,000,000 500,000 2,500,000 1.8Mature clonal plantation 1500 4,500,000 500,000 4,000,000 1.1*Rubber is processed by farmers into thick blocks of coagulated latex called "slabs", which contain about 50% of dryrubber and 50% of water and dirt.**World rubber prices have fallen since the Asian crisis because of the depreciation of the currency of the three majorworld producing countries. At the farmer level, rubber is sold 1,500 Rp per wet kilo or 3,000 Rp per dry kilo. Theworld price is around 50 US cents or 4,000 Rp per kilo.Source of data: Guyon (1999).

A study carried out in South Sumatra in 1999 highlights the plight of rubber smallholders (Gouyon,1999). The majority of rubber farmers own less than four ha of rubber and are close to subsistencelevel (see Table 14). Since the purchase of high-quality seedling material or the development oftheir own clones is too expensive and risky for them, their only solution to increase income is tostart plantations in unoccupied areas, usually close to logged-over forests, transmigration and agro-industrial companies where fire presents a significant threat and source of plantation damage.

Some of the farmers who had not benefited from development projects were trying to developclones with their own means, but often faced difficulties in controlling the growth of bushes and



24

Imperata grasses between the young rubber. Hence, their young plantations have been very prone tofire (Gunawan, 1997). It was estimated that about 40,000 ha of smallholder plantations burned in1997, of which 6,000 ha were young clonal plantations.

3.3.2 Malaysia

The share of Malaysian rubber plantations held by smallholders is more than 86 percent, secondonly to Thailand. Smallholders are organized under the Rubber Industry Smallholders DevelopmentAuthority (RISDA), Federal Land Development Authority (FELDA) and Federal LandConsolidation and Rehabilitation Authority (FELCRA), with RISDA being the main agencycoordinating rubber planting activities. Whereas some 1.26 million ha comprising 602,000smallholders were registered with the agency in 1990, RISDA’s latest census included 420,193smallholdings of an average of two ha each in the country (Ghazali, 1999). These smallholdersaccounted for 78 percent of Malaysia’s rubber production and 80 percent of the total acreage.

The average monthly income of a smallholder was RM 456, almost a quarter of the community wasreported as living below the poverty line, with another 35 percent in the poverty group. About 49percent were solely dependent on rubber for their income, with each smallholder having to supportan average of four dependents. Half of all smallholders were over 55 years of age (Ghazali, 1999).A special scheme developed by the Malaysian Rubber Board (MRB), FELCRA, RISDA andFELDA to speed up the consolidation of smallholders purports that incomes could rise to as muchas RM2,500-3,000 per month.

Table 15 Area of rubber plantations held by estates and smallholders in Malaysia in 1990-99

Year Estates Smallholdings('000 ha) (percent) ('000 ha) (percent)

1990 348.8 19.0 1,488.0 81.01991 333.4 18.3 1,485.3 81.71992 314.1 17.5 1,478.2 82.51993 292.5 16.6 1,470.0 83.41994 275.0 15.8 1,462.9 84.21995 255.7 15.1 1,433.1 84.91996 224.0 13.6 1,420.4 86.41997* 200.7 12.4 1,415.8 87.61998* 183.0 11.8 1,372.7 88.21999* 191.6 13.1 1,273.2 86.9

*Preliminary figures. Source: Malaysian Rubber Board.

Similar to Indonesia, one of the government’s main policy objectives vis-à-vis rubber productionhas been the consolidation of smallholdings in order to improve productivity and product quality.To this end, FELCRA was set up in the 1960s to persuade owners of small parcels to give up theirland to be centrally managed. However, attempts at consolidating the small, scattered and non-contiguous plots are frequently fraught with complications, including “multiple ownership, absenteelandlords, the view that land is a speculative asset and the lack of political will to solve theproblem," according to a former deputy director-general of FELCRA. State Governments have alsobeen slow in confiscating plots that have been left idle for long periods as provided for in theNational Land Code.



25

To this day, it is argued that converting the current production structure to more economically viableunits is central to any exercise to remake the smallholder sector. Accordingly, a 1996 strategy byRISDA aimed at merging 200,000 ha of smallholder rubber plantations into estates of a minimum of200 ha (Malaysian Timber Bulletin, 1996).

3.4 Switch to other crops

In Southeast Asia many estates are changing from growing rubber trees to oil palms as this cropprovides higher profits and is less demanding in terms of labor (unlike with the frequent tappingintervals demanded by rubber, oil palm is harvested when the fruit is mature). For smallholders, lowrubber and rubberwood prices and the low conversion rate of rubberwood into quality logs coupledwith distant access to sawmills have become strong deterrents for many smallholders to continueplanting rubber.

Table 16 Trends in estate crop areas harvested in Indonesia 1990-1999

Year Cocoa (‘000 ha) Natural rubber (‘000 ha) Oil palm (‘000 ha)1990 158 1,865 6731991 184 1,877 7721992 189 1,966 8751993 299 2,065 9211994 359 2,056 1,0451995 374 2,260 1,1901996 398 2,245 1,4281997 386 2,260 1,6221998 403 2,268 1,7951999 360 2,268 1,795

Source: FAOSTAT.

This development is illustrated, for instance, by the case of Indonesia, where oil palm and cocoaestate areas between 1990 and 1999 have increased much faster than rubber estate plantations (seeTable 16). While the latter increased by only 21.6 percent, oil palm and cocoa estate areas rose by 166.7 percent and 126.7 percent , respectively.



26

Similarly, Malaysia during the 1990s experienced a reversal of trends in oil palm and natural rubberplantation development (see Figure 7).

Figure 7 Oil palm and natural rubber areas harvested in Malaysia 1990-99

Source: FAOSTAT.

In Thailand, as indicated earlier, the rubber plantation sector in the traditional areas appears to besaturated and a switch to other crops has become evident (see Table 17). As in Indonesia andMalaysia, this switch is only in part caused directly by better income opportunities. In all threecountries, concerns for the livelihood security of rubber farmers has prompted agencies to facilitatethe diversification of smallholders into other crops. In Thailand, a crop diversification program wasincorporated into the rubber replanting scheme as early as 1992.

Table 17 Crop diversification in rubber replacement planting in Thailand 1992-1996

Year Total ReplantingNatural rubber

('000 ha)Other Tree

Crops ('000 ha)Other Crops as a percentage of

rubber plantation area1992 35.88 0.65 1.811993 39.47 3.87 9.801994 38.39 7.64 19.901995 29.33 6.05 20.631996 35.73 1.84 5.15

Source: Office of Rubber Replanting Aid Funds (1997).

1000

1400

1800

2200

2600

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Natural rubber Oil palm



27

4 RUBBERWOOD UTILIZATION

Before rubberwood found a use in timber and timber products, felled trees were almost exclusivelyused as fuelwood and charcoal in many countries. A significant share of rubberwood production isstill used for these purposes - almost 20 percent during the early 1990s in Malaysia (see Figure 8).Rubberwood charcoal was used extensively in the steel industry, rubber processing, tobacco curingand brick manufacturing.

Figure 8 Flow of rubberwood logs and primary products in Malaysia in 1992

All figures are in ‘000 m3. Source: Kollert & Zana, 1994; source of figures: Malaysia Timber Industry Board (1993)and calculations by Kollert & Zana.

Since the 1980’s, however, rubberwood has gradually established itself as a major wood product inseveral countries, particularly for the production of furniture, furniture components and woodpanels. Rubberwood plywood is used for both construction and decorative end uses. More recently,medium density fibreboard (MDF), particleboard and oriented strand board (OSB) have also joinedthe list of products derived from rubberwood and sawmill waste.

Figure 8 illustrates the flow of rubberwood logs and primary products in Malaysia in 1992 (Kollert& Zana, 1994). It illustrates that of the total log supply, sawmills took up almost 60 percent of thevolume, followed by 40 percent consumed in the market for small diameter logs. The authors add aword of caution concerning the high recovery rate (47 percent) in the production of sawnwood fromsawlogs. In an earlier study, Sim (1989) had found recovery rates ranging from 21 to 32 percent.

Furniture mills Buildinginudstry

Moulding &joinery mills

Steel millsRubber processingmillsTobaccomanufacturersBrickmanufacturers

Demand for end-use products

92.4%Sawnwood

470.9Plywood/veneer

34.8MDF122.4

Cemboard20.3 (1.6)

Domesticconsumption ofprimary products

Sawnwood38.8

MDF36.2

Chipboard35.5

Export of primaryproducts

Sawnwood509.7

Plywood/veneer34.8 (2.0)

MDF158.6 (1.8)

Chipboard35.5 (1.8)

Cemboard20.3 (1.6)

Fuelwood/charcoalProduction ofprimary products

Log supply

Domestic Production1872

Sawlogs1080

Veneer logs69.6

Small diameter logs722.4

57.7% 3.7% 38.6%

39.5% 285.4 8.8% 63.9 4.5% 32.4 47.2% 340.7

7.6% 22.8% 100%

100% 77.2% 100%

62.6%294.7

37.4%176.2

100%34.8

100%122.4

100%20.3

100%340.7



28

In a 1987 study on rubberwood utilization in Thailand, the authors found that 40.04 percent of totalrubberwood utilization was for wood products (furniture and furniture parts, cable reels, pallets,wooden boxes, picture frames, tooth picks, ice cream sticks, household utensils, wooden toys andsome miscellaneous products); 30.43 percent for fuelwood; 16.68 percent for particle board; 11.02percent for charcoal; and 1.83 percent for poles and piles (mostly for construction purposes).

4.1 Industrial processing of rubberwood

4.1.1 Primary industrial processing

Rubberwood logs are mostly used in the sawmilling sector. Out of a total of 4.6 million m3 sawlogsproduced in 1991, sawmills took around 80% of total log production (3.5 million m3) and the woodbased panel industry took the remainder. However, use in the wood based panel sector is rapidlyexpanding, although chipboard, cement board, MDF and OSB rely primarily on small diameter logs.Some statistics showing are given in Table 18 that show the scale of rubberwood sawnwood exportsfrom Malaysia.

Table 18 Malaysian export of rubberwood sawnwood to major countries*

1984 1991 1992 1993 1994Country ofDestination

Volume(m3)

Value(RM

million)

Volume(m3)

Value(RM

million)

Volume(m3)

Value(RM

million)

Volume(m3)

Value(RM

million)

Volume(m3)

Value(RM

million)Taiwan 19,735 6.0 45,463 29.4 20,332 11.8 17,735 11.4 32,059 24.7Japan 13,137 4.0 7,689 5.9 6,936 5.1 4,552 3.5 3,667 3.6USA 167 0.1 226 0.2 606 0.4 1,533 1.2 1,305 1.3Belgium - - 619 0.5 405 0.3 1,128 0.9 463 0.4Singapore 61,994 18.8 14,904 5.5 9,284 4.6 1,195 0.8 2,381 1.5Netherlands 239 0.1 0 0.0 461 0.4 128 0.1 442 0.4China 254 0.1 0 0.0 - - 35 ** - -S. Korea 98 ** 1,542 0.6 161 0.1 - - - -Others 140 ** 818 0.6 648 0.4 1,314 0.8 4,980 4.0

Total 95,764 29.1 71,261 42.7 38,833 23.1 27,620 18.7 45,297 35.9

* In order to encourage downstream processing, an export quota was introduced in 1990 and the export of sawnwoodwas completely banned in January 1994; the year before the introduction of the export restrictions in 1990, the exportvolume was 221,367 m3 (anonymous quoted in Kollert & Zana, 1994)** Less than 0.1 million m3

Source: Malaysian Rubber Board.

When logs are delivered to the sawmill, long transport distances have to be avoided because of thehigh possibility of insect and fungal attacks. For this reason, Indufor in 1993 estimated that only 80percent of total rubberwood are economically available in Thailand in Malaysia, 45 percent inIndonesia and 90 percent in India and Sri Lanka, the latter due to the general scarcity of wood rawmaterial, well-functioning smallholder organizations and effective replanting systems.

Sawing and chemical treatment is often carried out immediately after harvesting. A typicalrubberwood sawmill is small, with a sawnwood recovery rate of 15-35 percent; it is estimated thatthe average recovery rate is around 25 percent. In general these low recovery rates are the result of



29

the use of inappropriate technology to process small dimension logs such as those produced by therubber tree. Portable sawmills are common, especially in Malaysia, but are less common in Thailandwhere their use is restricted to deter illegal harvesting. Rubberwood mills are labor intensive andlogs are often loaded manually and fed through saws by hand. Sawmills integrated with dryingfacilities are more capital intensive and produce most of the sawnwood used for export or by themills producing export products such as furniture, parquet flooring and other wooden articles.

In the wood based panel industry, rubberwood plywood has proved to be a potential high value enduse, provided that appropriate technology is used. The rubber tree is also extremely well suited as araw material for the production of particleboard and MDF. In 1998, the Forest Research Institute ofMalaysia successfully carried out laboratory scale trials to produce Heveawood OSB.1 Strands weresliced from small diameter rubberwood logs and bonded together under heat and pressure usingphenol formaldehyde and isocyanate as exterior grade adhesives. The amount of adhesives wasfound to be about half of what is necessary for particleboard.

Rubberwood in the form of small logs, off-cuts, edges, slabs and branches is used for particleboardmanufacture. Some particleboards are laminated with overlays of a wide range of colors andpatterns. This product is sought after by the furniture manufacturers for making wardrobes, cabinets,tables, chairs, partitions and kitchen cabinets. The properties of a series of particleboard samplesfrom rubberwood are given in Table 19. The results indicate that particleboards of 19 mm thicknessusing 8 percent resin and 1 percent wax possess properties exceeding the specifications of theBritish Standard (Yusoff, 1994).

Table 19 Properties of single-layer particleboards made from rubberwood flakes

Sample Density(kg/m3)

MOR(MPa)

Internal bond(MPa)

Screw withdrawal(N)

Thickness swelling(%)

A 552 14.2 0.38 853 6.0B 626 19.8 0.65 960 4.8C 682 25.8 0.68 1303 3.3BS Type 1 - 13.8 0.34 360 12.0

(min.) (min.) (min.) (max.)Note: MOR: modulus of rupture or bending strength; pressing temperature: 140°C; pressing time: 10 minutes.Source: Wong & Ong, 1979.

Since rubberwood is readily attacked by fungi and insects, wood chips are easily discolored duringstorage. The manufacture of MDF with urea formaldehyde resin requires that chips be used withinfour weeks, preferably fresh, in order to maintain the expected strength properties of MDF (Razali& Diong, 1992). Boards made from fresh chips and urea formaldehyde have been found to attain theminimum bending strength (MOR) requirement of JIS A-5906-1983 type 200. However, theinternal bond in MDF tests was exceptionally high at about 16 kg/cm2.

1 Since its development and rapid expansion, OSB in general has threatened to replace the more traditional plywood in many

applications including uses where structural strength is required. While it can be produced with strength properties comparableto plywood, OSB is significantly cheaper to produce as small diameter and low quality logs can be used. Until 1998, OSB waslargely a North-American phenomenon, with production reaching almost 12 million m3. OSB has also spread to Europe and isgaining popularity in Japan, but as of 1998 remained to be introduced to Southeast Asia. Mills in Indonesia were at the planningstage and some OSB imports for packaging was reported.



30

The color of the boards varied from yellowish-cream to dark gray depending on the age of the rawmaterial. MDF of acceptable quality could be made from rubberwood that has been stored up tothree months with different treatments of fungicide and insecticide (Khoo et al., 1991). Pastconcerns about the rubber tree’s latex content, which is an undesirable substance when producingMDF board, have been alleviated with the fine-tuning of processing technology that allows theseparation of latex clumps from wood fibers before pressing. The results of some tests onrubberwood MDF are given in Table 20.

Table 20 Properties of rubberwood MDF

Cook number Density(g/cm3)

MOR(kg/cm2)

MOE x 1000(kg /cm2)

IB(kg/cm 2)

TS (%)

1 0.513 88 9.6 4.1 13.20.602 148 17.1 5.7 14.70.703 216 20.7 10.9 14.3

2 0.501 95 9.4 5.1 10.50.608 189 17.6 5.8 10.90.707 276 23.2 10.2 11.1

3 0.506 103 10.7 5.1 9.30.598 180 17.7 6.6 10.40.710 274 24.8 11.2 10.3

JIS A-5906-1983150-type 0.4-0.8 150 - 3.0 12.0 (max.)200-type 200 - 4.0 "

Note: MOR = modulus of rupture, MOE = modulus of elasticity, IB= internal bond, TS = thickness swelling after 24 hwater soak. Source: Tomimura et al (1990).

The particleboard industry in Southeast Asia, which comprised 16 mills in 1995, uses off-cuts,trimmings, slabs and small logs of rubberwood and therefore provides an outlet for the lessmarketable part of the tree. Rubberwood particleboard is usually overlaid with a laminate and isused extensively by the furniture industry.



31

The number of MDF plants using rubberwood has increased rapidly since 1992 (see Table 21).MDF plants in Thailand, Malaysia and Indonesia consumed some 0.7 million m3 of rubberwoodlogs in 1994, but it is expected that this demand will rise to 1.5 million m3 in 1997. This rapidincrease in demand may result in greater competition for rubberwood trees and upward pressure onprices. Some statistics for rubberwood processing in China are given in Table 22.

Table 21 Existing and projected capacity of MDF plants in 1996

Current Projected until 1997Country Number

of millsVolume of woodfibre used (m3)

Numberof mills

Volume of woodfibre used (m3)

ThailandAll MDF mills 6 531,200 9 1,261,600Rubberwood MDF mills 1 83,000 3 538,000MalaysiaAll MDF mills* 5 597,600 6 913,000Rubberwood MDF mills 5 597,600 2 182,600IndonesiaAll MDF mills 1 162,000 7 1,131,000Rubberwood MDF mills 0 0 1 185,000

* As of 1999, Malaysia had added a seventh MDF plant. Source: M.M.F.

Table 22 Secondary rubberwood processing and utilization in China in 1994

Item Hainan Yunnan GuangdongLog production (m3) 180,000 20,000-30,000 /Sawnwood production (m3) 62,185 7,000 /No. of sawnwood plants 15 3 /Plywood production (m3) 23,151 5,000 3,000No. of plywood plants 10 1 1Particle board production (m3) 28,000 0 0No. of particle board plants 1 0 0No. of model product plants 1 0 1

Source: ITTO (1995).

4.1.2 Secondary industrial processing

Rubberwood's good working qualities for machining, acceptable durability, light natural color andadaptability in accepting paints and other finishes, makes it an ideal wood for furniture. Theadvantages of rubberwood in furniture making are believed to compensate for the recognizedproblems of variations in color and density but the need remains for preservation and dryingtreatment in order to avoid problems of discoloration or bowing and twisting of the wood when themoisture content of the wood rises above 10-12 percent.

The rubberwood processing industry of Malaysia is recognized to be a world leader because of thestrength of its secondary-processing sector. Rubberwood in Malaysia is the main wood used by thefurniture industry. It is estimated that exports of rubberwood furniture from Peninsular Malaysiaaccounted for 70 percent of all wooden furniture exported in 1994. Malaysia’s exports of wooden



32

and rattan furniture have increased from RM45.6 million in 1986 to RM2.61 billion in 1997 andRM4.36 billion in 1998 (Bani, 1999). (See Figure 9 for more details of Malaysia’s furniture exportsover the period 1988 to 1995).

Figure 9 Malaysian exports of furniture in 1988-1995

Source: Malaysian Furniture Industry Council

The percentage of rubberwood entering secondary processing has also been rising in Thailand,where some 200 out of a total of 1,400 furniture manufacturers using rubberwood as a raw material.The quality of rubberwood furniture is high enough to be accepted in world markets and comparesfavorably with rubberwood furniture produced in Malaysia.

Thai Rubberwood furniture accounts for 60 percent of total production of wooden furniture. In1999, production of rubberwood furniture for 2000-01 was predicted to increase as a result of moreliquidity and demand from foreign markets. A short-term problem was low supply of rubberwoodbecause wood traders chose to export processed wood to China and Taiwan, where they could fetchhigher prices. However, production capacity utilization was expected to increase to over 50 percent,because the local wood supply could last at least 10 years if the resource is managed efficiently.Domestic market value for 1997-99 decreased 30-40 percent to Baht 4-5 billion (Bangkok Bank,1999). Approximately 70 percent of rubberwood furniture is exported to foreign countries (mainlyJapan and U.S.A., accounting for 80 percent of the total) and in the form of knockdown furniture.Exports during 1997-99 were Baht 10 billion.

Other minor producers of rubberwood furniture are India, Indonesia and Sri Lanka. The state ofdevelopment of the furniture industry in India is still behind that of Malaysia and Thailand andproduction is mainly geared toward the domestic market. It is estimated that only 5 to 8 percent ofrubberwood is utilized in downstream processing in India. In Indonesia, despite the large area of

0

300

600

900

1200

1500

1800

1988 1989 1990 1991 1992 1993 1994 1995

WoodenRattanMetal



33

rubber plantations, the use of rubberwood in furniture is still limited to some 20 plants. The level ofquality in the industry is also considered to be lower than in the main producing countries. Therubberwood processing industry in Sri Lanka is probably the oldest of all the countries. However,this industry has not developed significantly either in volume production or in the level oftechnology used in processing plants.

4.1.3 4.1.3. Other uses

Some tests have been carried out to evaluate the potential of rubberwood for pulping. These testshave shown that rubberwood could be used for the production of semi-chemical pulp. OneMalaysian company is exporting rubberwood chips to Japan for the production of corrugated papermedium. However, apart from this small amount of trade, there is no other recorded use ofrubberwood for pulping.

Good quality rubberwood charcoal and briquettes can be produced from rubberwood waste.Rubberwood charcoal has been commercially produced in Malaysia for many years. In addition tofixed charcoal kilns, transportable metal kilns have been introduced in the last decade whichproduce a quality of charcoal that is comparable to the quality produced by fixed kilns. Anothermarket for rubberwood is fuelwood and charcoal.

Unprocessed rubberwood is also sold in local markets for household use.

4.2 Rubberwood cost and prices

As already noted, the physical characteristics of rubberwood enable it to be used extensively in themanufacture of chairs, stools, benches, tables and bed legs. It is also suitable for flooring andtableware. The greatest potential for substitution lies in the replacement of Asian timber species,such as Lauan, Meranti, Nyatoh, mixed light hardwoods and especially Ramin. Its potential tosubstitute for temperate species is more limited. Rubberwood has the potential to compete withbeech, which is used for chairs and table legs. Because the light color of rubberwood allows it to bestained, it has begun to make inroads in traditional domains, including oak and cherry in cheapfurniture ranges in the United States of America and Japan. However, a major factor which willinfluence the extent to which rubberwood utilization becomes a success will be the price of the rawmaterial itself.



34

4.2.1 Stumpage prices

Little information on rubberwood stumpage prices can be found. The latest data available werecollected by ITC in the third quarter of 1992 and are shown in Table 23.

Table 23 Rubberwood stumpage prices in selected countries in the third quarter of 1992

US$ per m3US$ per haAll wood Logs

Country

Average Range Average Range Average RangeChina 2,267 13 27India 400 8Indonesia 299 50- 400 8Malaysia 459 0-1,200 9 0-34Sri Lanka 1,417 675-1,710 20 12-30Thailand 2,312 770-7,600 13 4-40 34Vietnam 1,593 9

Source : ITC (1993).

As Table 23 shows, there was a very wide range of stumpage prices, which is likely to still exist.The highest prices were found in the Thai Province of Chantaburi where there is extensiverubberwood utilization. By contrast, the price in Southern Thailand, where there is much lessrubberwood utilization, was lowest (US$770/ha).

The situation in Malaysia was similar. The highest prices were paid in Peninsular Malaysia(US$1,200/ha or US$34/m3), where most wood industries are located. In regions where rubberwoodsupply was decreasing (e.g. Peninsular Malaysia), stumpage prices were also reported to have beenrising. In other parts of Malaysia, where rubberwood had not yet been commercialized on largescales, stumpage rates were still low or even negative (i.e. plantation owners have to pay for fellingand clearing). Stumpage prices were low in India (US$400/ha or US$8/m3) and in Indonesia, whichhas the largest plantation area but a low utilization rate. The other main reason for these differencesin stumpage prices is that some of those countries still have large supplies of other types of timber.

Various reasons explain the price differences. In Thailand. rubberwood prices at the farm gate varyfrom plantation to plantation depending on the following factors (Paechana and Sinthurahat, 1997):

1. Number of stands per unit area - Higher rubber tree numbers/unit area yield higherwood totals. Rubber stands are usually 375 - 400 trees per ha, in line with pastrecommendations, but have been found as high as 800 for LTCs.

2. Age and size of rubber trees - The size of rubber trees depends not only on age butalso on clone, soil and climatic conditions. Larger-sized trees achieve higher prices.

3. Location of the plantation - Due to rubberwood’s susceptibility to mould and weevilinfection, timber from rubber plantations close to factories and/or transportation routesgains higher prices than wood from more remote areas.

4. Seasonal price variation - Rubberwood supply is insufficient in the rainy season due totransportation difficulties and prices therefore higher than in the dry season.



35

5. Middleman activities - Many farmers ignore the rubberwood price since they receivefunding from ORRAF. When middlemen propose even a low price it is acceptedwithout hesitation because it used to cost money for old rubberwood clearance in thepast. Some middlemen use small trucks and local routes to travel from plantation toplantation, looking for fallen and leaning rubber trees that obstruct tapper work. Theybid for such timber at a low price or even for free and subsequently fell them usingchainsaws.

Rubberwood logs in Malaysia have been valued cheaply compared to logs from natural forests. Ithas been argued that while plantation owners do not obtain prices for the logs that are equivalent tothe value of the raw material, sawmillers are able to achieve high profits (Kollert, 1994). The salesprice of sawnwood is close to that of light hardwood species from natural forests. Rubberwood logswould have to cost around RM 120 per m3 (ex-sawmill) to reduce the sawmillers' profit to a levelthat is comparable to sawnwood production with light red Meranti. During the early 1990s, this logprice was almost three times the prevailing market price.

The low market price of rubberwood logs in Malaysia - and elsewhere - may be explained by thespecific circumstances under which rubberwood is produced, namely as a by-product in agriculturalplantations. The business objective of a plantation owner is not to supply logs for the timber market,but to replace old rubber trees at the end of the crop rotation. This in turn produced a market failurewhereby high demand of wood processing industries does not translate into high raw materialprices. As long as rubber farmers continue their operations a continuous supply of undervaluedrubberwood logs from obsolete plantations is ensured.

What is clear is that the 60-fold increase in Malaysia’s rubberwood log production between the mid-1980s and mid-1990s was mainly due to the successful efforts of estates to fully utilize rubberwood.The poor quality of logs from smallholdings and the remoteness of their location limit the chancesof smallholders to find buyers for their timber. On the other hand they also appear to be reluctant tosell their timber for the given low prices. Both conditions render the access of rubberwood to thetimber market difficult (Kollert, 1994).

Given these dynamics of rubberwood production, it is difficult to foresee sharp price increases.Local variations may occur, due to climate-induced gluts or shortages, the refusal of farmers orestate managers to replant trees at prevailing rubber prices or if rubber tree plantations come to bemanaged for wood, rather than latex, as was suggested in parts of Thailand and may be the case inareas of Peninsular Malaysia. Some increases may also occur where established processingcapacities that use both rubberwood and other species have to cope with the increased shortage ofthe latter or where the vicinity of newly established processing centers sharply increases demandbeyond what rubber growers are able to supply. Where raw rubberwood prices increase sufficiently,some smallholder resources may enter the market.

4.2.2 Log and sawnwood prices

Rubberwood log and sawnwood prices are given in Table 24 and Table 25. Table 24 indicates theprice of rubberwood logs and sawnwood (for domestic and export markets) in Peninsular Malaysiain the month of May 1992. Similar data for November 1996 is given in Table 25 (unfortunately datafor other countries are not available, so it is difficult to ascertain whether the changes indicated inthese tables have also taken place in Thailand and Indonesia).



36

Table 24 Comparative prices of logs and sawnwood in May 1992

Species Logs Sawnwood

(US$/m3)

Domestic(green)

(US$/m3)

Export (export gradedand kiln dried)

(US$/m3)Rubberwood 15.9 89.0 220Nyatoh 125.9 260.0 358Ramin n.a. n.a. 389Jelutong 118.8 245.0 406Light Red Meranti 150.0 277.7 406Dark Red Meranti 152.6 322.2 482

Source : ITC.

Table 25 Comparative prices of logs and sawnwood in November 1996Species Logs

(US$/m3)Sawnwood(US$/m3)

Rubberwood 32-34 280-290Meranti 260-265 350-360Merbau 200-205 n.a.Kempas 150-155 230-245Keruing 190-195 n.a.

Source : ITTO.

These two tables demonstrate that rubberwood is a low priced raw material in log form but its pricedifferential narrows when processed. They also show several interesting aspects of recentrubberwood price developments, including:

• low rubberwood log prices reflect the low recovery rate of sawnwood;

• higher prices achieved when sawnwood is graded and kiln dried for export;

• a sharp increase over four years of rubberwood log prices (+107 percent) and sawnwood(+220 percent); and

• an increasing divergence between rubberwood log prices and sawnwood prices(450 percent in 1992 but 760 percent in 1996).

The historical increase in the demand for rubberwood in Malaysia and this sharp increase in pricesuggest that any future increase in demand might result in increased prices for rubberwood in thefuture. However, a further escalation of rubberwood prices could pose serious problems to thefurther development of the rubberwood furniture industry which, at present, is only competing in thelow and medium end of the furniture market.



37

In Thailand, the rubberwood price at the factory is not much different between factories whilst theyear-round prices are more or less the same. The following prices could be obtained from eachfactory (Paechana & Sinthurahat, 1997):

• Timber with a diameter of more than 20 cm is used primarily in the veneer industry. Thetimber must be taken to the factory immediately after being felled and fetchedUS$50 per ton.

• Timber with a diameter of 15-20 cm is used mainly for sawnwood. It has to be sent tothe factory within one week of felling. The price is US$32 per ton.

• Timber with a diameter less than 15 cm is used for particle board. It should be sent tothe factory within 3 weeks. This kind of timber is bought at US$10-15 per ton. The priceis more or less the same as for fuelwood.

Table 26 indicates the relative price of rubberwood sawnwood in the highly competitive market ofTaiwan Province of China.

Table 26 Prices of Sawnwood in Taiwan province of China in October 1996

Product Price (US$/m3)Rubberwood 25 mm. boards 365-370Rubberwood 50-75 mm. squares 415-420Rubberwood 75-100 mm. squares 440-450Sepetir GMS ( AD ) 360-370Ramin 545-565Oak 25 mm. boards 580-585Maple 835-850Cherry 1150-1200

Source: ITTO.

Rubberwood sold in this market probably comes from Thailand. In this table it appears that the pricefor rubberwood sawnwood (50-75 mm) is some 15 percent above Sepetir (another popular furniturespecies which can be substituted by rubberwood). However, it is notable that the price ofrubberwood is 25 percent less than the price of Ramin, the species that has been identified as closestto rubberwood in terms of properties.

In most studies previously conducted, it appeared that many users utilized rubberwood because ofits lower price. It appeared also that relative price increases would affect consumption but it was notclear to what level rubberwood prices must rise before consumers switch to other woods. The effectof price elasticity is rather dependent upon where on the demand curve rubberwood is currentlyperceived and the extent to which suitable alternative species and materials are available.Rubberwood is particularly successful in the low-to-middle priced wooden furniture sector, such asused in tables and shelving systems. Such low prices can only be maintained with a low-to-mediumcost raw material. If rubberwood prices enter a medium-to-high range, the marketing advantage of



38

being a species from a renewable resource may not be sufficient. It is the additional processing,wastage and need to stain/finish, which determines the need for a price differential for rubberwood.

One further development, which would suggest an upward trend in rubberwood prices, is thedevelopment of new mills. Table 21 indicated that six new MDF mills based on rubberwood shouldstart operation by the end of 1997. It is not known where these new mills will be located inThailand, Malaysia and the Philippines but it is expected that they will be located in areas whereindustrial processing is already advanced. The problems of transporting rubberwood over longdistances limits the possibility of utilizing the resource from a less industrialized area with lowerprices.

4.3 Current consumption in producing countries

4.3.1 Consumption by the primary processing industries

As indicated previously, consumption of rubberwood was estimated to be around 4.6 million m3 in1991, out of which 3.5 m3 was used by the sawmilling industry and some 1.1 million m3 by thewood-based panel industry. Thailand and Malaysia together accounted for 65 percent of total logproduction and these two countries have developed the most extensive export industries based onrubberwood. Assuming growth of rubberwood processing by 8 percent/year for Thailand andMalaysia and no growth for the other countries using rubberwood, it can be estimated that around6.0 million m3 of rubberwood logs might have been produced/consumed in 1996. This totalaccounts for some 5 percent of production of non-coniferous sawlogs, but this percentage variesmarkedly among countries. For example, it is low in timber rich countries, such as Malaysia andIndonesia, or in large countries, such as China and India, but high in others such as Thailand andSri Lanka.

4.3.2 Consumption by the secondary processing industries

Producing countrys' secondary processing industries using rubberwood cover a large spectrum frompallet manufacturing to the most advanced export-oriented furniture and joinery manufacturers inMalaysia and Thailand. There are no recorded statistics on the amount of rubberwood logs used bythe furniture industry or on the production of rubberwood furniture in the main rubberwoodproducing countries. However, it is estimated that in 1992 some 85 percent of rubberwoodsawnwood produced in Malaysia was processed further into furniture. A tentative estimate, based onprevious studies, indicates a figure of 1.6 million m3 of rubberwood logs were used for sawnwoodproduction in Malaysia in 1995. Assuming a 33 percent average sawnwood yield, this would give520,000 m3 of rubberwood sawnwood production (6 percent of total sawnwood production inMalaysia) and, using a yield of 50 percent for sawnwood to finished products, some 220,000 m3 ofsecondary products production from rubberwood.

4.4 Current world demand for rubberwood

Since the 1993 in-depth study carried out under the auspices of the International Trade Centre, noequivalent work has been done. The estimated world consumption of rubberwood in 1991 amountedto 238,000 m3 (product volume). Table 27 shows the importance of the main import markets and the



39

sawnwood equivalent of rubberwood product consumption for these markets. The same studyindicated rubberwood consumption by main importing markets and product type (Table 28).

Table 27 Consumption of rubberwood in 1991

Actual Sawnwood equivalentImporter(‘000 m3) (percent) (‘000 m3) (percent)

United States of America 92.4 39 184.6 41Japan 75.0 31 135.4 30Europe 30.2 13 59.2 13Taiwan Province of China 27.4 11 46.3 10Republic of Korea 9.2 4 16.9 4Singapore 3.8 2 5.4 1Total 238.0 100 447.8 100

Note: product volumes were converted to sawnwood equivalents assuming a 50% recovery rate. Source : ITC (1993).

Table 28 Use of rubberwood by country and product type in 1991

Country or region Lumber

(‘000 m3)

Furniturefinished(‘000 m3)

Furnitureparts

(‘000 m3)

Builders’woodwork(‘000 m3)

Other

(‘000 m3)

Total

(‘000 m3)United States of America 0.2 65.0 12.0 2.3 12.9 92.4Japan 14.6 31.5 21.9 2.0 5.0 75.0Europe 1.4 16.4 n.a. 8.0 4.4 30.2Taiwan Province of China 8.5 16.0 0.9 <0.1 2.0 27.4Republic of Korea 1.5 0.8 3.9 1.7 1.3 9.2Singapore 2.3 0.5 0.6 0.2 0.2 3.8Total 28.5 130.2 39.3 14.2 25.8 238.0Percent 12 55 16 6 11 100

Source: ITC (1993).

In Table 27 and Table 28, total use is somewhat underestimated because imports from Indonesia,Vietnam and China are not included. Nevertheless, data shows that furniture accounts for the largestshare of rubberwood consumption, highlighting the advanced development of these industries inSoutheast Asia. By contrast, rubberwood sawnwood consumption was relatively small anddeclining, confined mainly to Japan and Taiwan. This reflects problems, such as the lack of suitabledimensions, twisting, staining and the lack of a standard grading system.



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Based on the above consumption tables, ITC also produced projections of rubberwood productconsumption in 1996 and (Table 29).

Table 29 Estimated rubberwood consumption in 1991 and 1996

1996Product Consumptionin 1991(000 m3)

Actual(000 m3)

Sawnwood equivalent(000 m3)

Change1991 – 1996

(% per annum)Lumber 28.5 28.5 28.5 n.a.Furniture 130.2 253.5 507.0 8.3(Furniture parts) 39.3Builders’ woodwork 14.2 28.9 57.8 15.2Other wooden items 25.8 38.5 71.0 8.3Total 238.0 349.4 674.3 8.0

Source : ITC (1993).



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5 OUTLOOK

This section discusses the potential of rubberwood to continue the trend exhibited during the last tenyears. The speed at which it has established itself as an important wood product in internationalmarkets is indeed remarkable. Many of the factors that have contributed to this have been outlinedin the foregoing sections. Because of these factors, it is safe to say that rubberwood will continue toplay an important role in furniture, furniture parts and wood-based panel industries.

The present report has also highlighted some of the obstacles to increased rubberwood utilization,chief among them the difficulty to access smallholder resources. Some of these difficulties willprobably be overcome in due time. In order for this to happen, however, policy environments willlikely have to be streamlined to make rubberwood utilization more attractive. In order forgovernments (and the private sector) to pay increased attention and allocate appropriate resources,in turn, rubberwood will have to continue to capture increasingly competitive world markets.

The paucity of data, particularly on the demand side, renders the development of sound projectionsa difficult task. Success stories, such as that of the Malaysian rubberwood industry, can underlinethe importance of more concerted efforts to mitigate the prevailing information scarcity. The socio-economic difficulties encountered by the large majority of rubber smallholders, as well as theenvironmental benefits of rubberwood compared to timber harvested from natural forests, wouldcertainly justify the undertaking.

5.1 Rubberwood availability

An appropriate starting point in determining the outlook on rubberwood availability is a look atcurrent projections concerning rubber prices. After the decades-long decline of natural rubber pricesto historic lows, international rubber bodies have recently made more optimistic assessments. In1998, the Association of Natural Rubber Producing Countries (ANRPC) reported production inMalaysia, Sri Lanka and Papua New Guinea would decline, but output in India, Indonesia, Thailandand Vietnam was expected to expand (Koetsawang, 1998). In 1999, the International Rubber StudyGroup (IRSG) announced that world production of natural rubber would fall short of consumptionin 2000 for the second year in a row, leading to a further reduction of stockpiles. The Secretariat ofthe International Natural Rubber Organization (INRO) has warned of a shortfall in natural rubbersupply within ten years unless current trends are reversed.

The International Rubber Research and Development Board has also argued ahead of its 2000annual meetings that emerging into the new millennium there should be no cause for pessimism inthe global natural rubber business. Competitive pressure from other crops may force rubbercultivation to shift into other areas. The Economist Intelligence Unit expects prices to double in2001, partly because of the current surge in crude oil prices which is leading to higher carbon blackprices in the USA. Nonetheless, rubber prices may continue to hover at lower than expected levels,at least until INRO releases its stock of 140,000 tons, which is supposed to be completed by June2001, as part of its dismantling process.

These expected world demand and price developments, at the very least, should signal to rubbergrowers that the crop is worth maintaining. On the other hand, the prospect of higher rubber prices,similar to the Asian financial crisis, may induce rubber growers to hold off on replanting while thehigher prices last.



42

The following sections review information on outlook studies that have been done, primarily forMalaysia and Thailand, the two producers with the largest stake in rubberwood supply and demandtrends. For selected countries, quantitative assumptions found in the literature are used to deriverough estimates for rubberwood availability.

5.1.1 Malaysia

The Malaysian government has recently confirmed rubber’s designation as a strategic commodity.As outlined earlier, the main agencies responsible for coordinating smallholder activities havesimilarly drawn attention to a strong policy in support of the maintenance of rubber plantations. Inspite of these declarations, replanting rates have fallen short of planned and targets, casting doubtnot only on the possibility that the decline in rubber plantation areas can be reversed, but also on thelong-term projections made during the early part of the 1990s, when replanting rates wereconsiderably higher than they are now. Current replanting rates need not concern us for the moment,however, since trees felled until 2010 were planted during the 1980s.

Table 30 Projected total wood production from rubber plantations in Peninsular Malaysiafrom 1996-2012

Year Estates(‘000 m3)

Smallholdings(‘000 m3)

Total(‘000 m3)

1996 2,899 4,208 7,1071998 1,951 6,685 8,6362000 2,683 6,062 8,7452002 1,847 4,961 6,8082004 1,488 3,451 4,9392006 1,431 5,157 6,5882008 1,720 7,261 8,9812010 1,334 4,748 6,0822012 581 2,626 3,207

Source: Arshad & Othman (1996).

The replanting rates reported for 1971-87 translate into projected total rubberwood productionindicated in Table 30 (Arshad & Othmar, 1996). To derive these, the authors assumed yields of190 m3 and 180 m3 of greenwood up to 8 cm diameter for estates and smallholdings, respectively.Assuming 57 m3 of usable logs and 18.1 m3 of sawnwood from estates and 54 m3 of usable logs and10.8 m3 of sawnwood from smallholdings, in turn, produced the outlook on rubberwood logs andsawnwood illustrated in Table 31.

A more conservative assessment was made by Ismariah & Norini (1994). In their projections, theyassumed gross yields of 180 m3 and 100 m3 (branches above 5 cm) and net volumes suitable forsawnwood processing of 20 and 15 percent for estates and smallholdings, respectively. While theoutlook was more sober, the declining trend in rubberwood availability was confirmed.

Table 31 Projected log and sawnwood production from rubber plantations in PeninsularMalaysia from 1996-2012



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Year Estates Smallholdings TotalLogs

(‘000 m3)Sawnwood(‘000 m3)

Logs(‘000 m3)

Sawnwood(‘000 m3)

Logs(‘000 m3)

Sawnwood(‘000 m3)

1996 870 276 1,263 253 2,133 5291998 585 186 2,006 401 2,591 5872000 805 256 1,819 364 2,624 6202002 554 176 1,488 298 2,042 4742004 446 142 1,035 207 1,481 3492006 429 136 1,547 309. 1,976 4452008 516 164 2,178 436 2,694 6002010 400 127 1,425 285 1,825 4122012 174 55 788 158 962 213


What both of these outlooks appear to leave out is the fact that a considerable share of resources iseconomically unavailable, estimated to be as much as 20 percent (ITC, 1993). Subtracting this fromsmallholder plantation areas where trees reach 25 years of age (according to the age distribution datareported in Section 3.1.2 on page 14) and using conversion rates averaging those used by the twooutlook studies quoted above generates the projections illustrated in Figure 10 and Figure 11.

The graphs in Figure 10 and Figure 11 corroborate the trends indicated by Arshad & Othmar andIsmariah & Norini. First, an increasingly larger share of total rubberwood production will beavailable from smallholder plantations. Second, rubberwood log and sawnwood availability willdecline steadily until 2004 and bottom-out in 2010 after a short recovery around 2007. Theseprojections may yet prove to be too conservative, in large part because smallholders may chose topostpone replanting if rubber prices increase as expected during the early part of this decade.



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Figure 10 Adjusted outlook to 2016 for rubberwood log availability in Malaysia

Note: amounts are in thousand cubic metres.

Figure 11 Adjusted outlook to 2016 for rubberwood sawnwood availability in Malaysia

Note: amounts are in thousand cubic metres.

5.1.2 Thailand

The outlook for Thailand is in some ways similar to that of Malaysia. Both countries have wellestablished, high quality rubber plantations dominated by smallholders. Both countries have madesignificant inroads into downstream rubberwood processing. Yet the rubber growing sectors in both

0

200

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800

1000

1200

2000 2002 2004 2006 2008 2010 2012 2014 2016Estates Smallholdings

0

100

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2000 2002 2004 2006 2008 2010 2012 2014 2016

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countries are beginning to show signs of saturation and moves into other crops, though more so inMalaysia than in Thailand. There are also some important differences. Most significantly,Thailand’s rubber sector has been expanding throughout the 1990s and is developing a new rubbergrowing stronghold in the northeast, whereas Malaysia’s sector has been contracting. In addition,rubber replanting programs have been more successful in Thailand, providing a more stable long-term outlook to potential investors.

In the projection illustrated in Table 32, the authors assumed that total rubber plantation areas wouldremain stable at 1.89 million ha; 90 percent of the total area can be economically accessed; sawlogyields are 55 m3 per ha after a 25-year rotation; and logs can be processed into sawnwood with a 30percent recovery rate (Promachotikool & Doungpet, 1996).

Table 32 Outlook for rubberwood availability in Thailand

Year Plantations<5 years old

(‘000 ha)

Plantations>5 years old

(‘000 ha)

Total

(‘000 ha)

Felled area

(‘000 ha)

Availablesawlogs

(‘000 m3)

Potentialsawnwood(‘000 m3)

1992 784 1,104 1,888 48.0 2,360 7101997 864 1,024 1,888 56.0 2,800 8402002 1,008 880 1,888 67.2 3,320 1,0002007 1,136 752 1,888 75.2 3,890 1,1702012 1,360 528 1,888 75.2 4,180 1,2502017 1,552 336 1,888 75.2 4,460 1,340

Source: Promachotikool & Doungpet (1996).

Compared with data from other studies, this projection is somewhat on the optimistic side withrespect to economic availability (ITC in 1993 estimated only 80 percent to be economicallyavailable) and with respect of annual felled areas (average areas felled in 1986-1990 and 1991-1995were 38,300 ha and 33,077 ha, respectively; Paechana & Sinthurahat, 1997). Even so, potentialrubberwood and sawnwood availability in Thailand compares very favorably with that of Malaysia.

5.1.3 Indonesia

Indonesia is at present the world's second largest producer of natural rubber after Thailand. Despiteacute price fluctuations in the past several years, Indonesia's production volume and exports ofrubber have not been significantly affected. From 1993 to 1997, Indonesia's rubber production roseby 1.3 percent on average, from 1.48 million to 1.55 million tons. In 1997, Indonesia exported 1.43million tons of processed natural rubber, but exports declined by 19.2 percent in 1998, as importerswere reluctant to purchase this commodity from Indonesia due to its uncertain political situation.Rubber experts predict that this decline is only temporary and that the annual global demand growthof 2.1%, mainly from the tire industry and other downstream industries, will cause Indonesia'sfuture production and exports to rise again. Rubber estates have gradually been converted to oilpalm plantations as the obtained revenue from palm oil has been shown to be at least double torubber.

The implications of these developments for rubberwood availability are threefold. First, sinceestates in Indonesia are most likely the main source of rubberwood, availability will gradually



46

decline as larger plantations switch to crops that are more profitable. Economically availableplantations have been estimated as low as 45 percent (ITC, 1993).

The lack of information on rubber tree age distributions makes projections difficult. At best, thefollowing rough calculations can provide a point of departure using 1998 as a base year.Assumptions include that rotations are 25 years for estates and 35 years for smallholdings; that allestates qualify as economically available areas; sawlog yields are 36 m3/ha for estates and 15 m3/hafor smallholdings (using the estimates of Ismariah & Norini for Malaysia); recovery rates forsawnwood are 20 percent. These assumptions give the estimates of potential production shown inTable 33.

Table 33 Potentially available rubberwood logs and sawnwood in Indonesia in 1998

Production stage Estates Smallholdings TotalRubberwood area (‘000 ha) 551 2,848 3,399Estimated replanting areas (‘000 ha) 22 81 103Total economically available (45 percent of total area) 248 1,282 1,530Potentially available logs (‘000 m3) 793 367 1,161Potentially available sawnwood (‘000 m3) 159 105 303

This very rough estimation would indicate a level of potential sawnwood production in 1998 that isabout 10 percent higher than the conservative estimate for the same year by Ismariah and Norini(1994) for Malaysia.

5.2 Rubberwood demand by processing industries

Potentially available rubberwood need not find an outlet concerned with producing finishedrubberwood products. As has historically been the case, a substantial share of harvested rubberwoodis either burned at the site or used for fuelwood or charcoal. The increasing use of rubberwood infurniture, furniture parts and panel products suggests, however, that a growing share of availablerubberwood finds its way to primary and secondary processing industries.

The momentum that has been created by Malaysia and Thailand will likely encourage other rubberproducing countries, particularly Indonesia, to promote more rubberwood utilization. Informationon future developments in processing capacity is typically scarce, with the exception of informationfor Malaysia and Thailand. Table 34 to Table 36 present some forecasts for these two countries.

A number of points are of particular interest in the information provided in these tables. First, thedata for Malaysia reveals that significant supply shortfalls are expected for rubberwood sawlogsduring the years 2002-06 and again from 2010 and for rubberwood chip logs during the years 2004-06 and again from 2010. These expectations will likely translate into higher prices paid to rubberfarmers in close proximity to processing centers.

The second point to note is that, in contrast to Malaysia, Thailand is not expected to face a similarshortage (compare Table 32 with Table 36). For each of the years reported, potential sawnwoodsupply is at least 300,000 m3 greater than projected demand.



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Table 34 Supply and demand of rubberwood sawlogs in Malaysia in 1996-2012

Supply and demand of sawlogs ('000 m')YearAvailable supply Projected demand Difference

2000 1,837 1,569 2692002 1,429 1,600 -1712004 1,037 1,632 -5952006 1,383 1,665 -2822008 1,886 1,698 1882010 1,278 1,732 -4542012 673 1,767 -1,094


Table 35 Supply and demand of rubberwood chip logs in Malaysia in 1996-2012

Year Supply and demand of chip logs ('000 m3)Available supply Projected demand Difference

2000 4,285 2,880 1,4052002 3,336 3,168 1682004 2,421 3,485 -1,0642006 3,228 3,834 -6062008 4,401 4,217 1842010 2,980 4,639 -1,6592012 1,572 5,103 -3,531

Note: chiplogs have diameters below 8 cm. Source: Arshad & Othman (1996).

Table 36 Outlook for demand for various wood products in Thailand

Product 2002 2007 2012 2017Sawn hardwood 5.59 6.69 7.90 9.28Sawn rubberwood 0.70 0.78 0.86 0.96Plywood and veneer 0.76 0.92 1.08 1.28Fibreboard 0.31 0.39 0.48 0.57Particleboard 0.55 0.75 0.99 1.29Poles 1.90 1.90 1.90 1.90

Note: all amounts are in thousand cubic metres. Source: Promachotikool & Doungpet (1996).

5.3 Export potential of rubberwood furniture

This section addresses the export potential of rubberwood in its two most important forms: furnitureand sawnwood. The export potential of rubberwood-based plywood, particleboard and particularly



48

MDF is not assessed in this study because it would be necessary to undertake a more in-depthanalysis. It should be noted, however, that if rubberwood processing into panels was to increasedramatically this could limit the availability of rubberwood for the two uses examined here.

To ascertain the likely future demand for rubberwood furniture it is necessary to place trade andconsumption of rubberwood furniture in the context of overall furniture trade and consumption.Table 37 shows the relative importance of rubberwood furniture and wooden furniture imports inthe main import markets.

Table 37 Relative importance of rubberwood in imports of wooden furniture in 1991

Country/Region Total woodenfurniture

consumption

Total woodenfurnitureimports

Rubberwoodfurnitureimports

Total importsas a

percentage ofconsumption

Rubberwoodimports as a

percentage oftotal imports

United States 16,896 1,910 657.5 11.3 34.4Japan 15,670 585 248.8 3.7 48.6Europe 43,177 8,058 190.7 18.7 2.4Taiwan Provinceof China

386 41 10.3(1) 10.6 25.1

Republic of Korea 1,820 33 8.9 1.8 26.7Singapore 110 212(2) 25.3(2) N.A. 11.9Total 78,059 10,839 1,177.5 13.8 10.8

Note: this table includes imports of parts (1) and imports that are subsequently re-exported (2). Imports are measuredin US$ million. Source: ITC.

The share of the wooden furniture market held by imports is increasing in the United States ofAmerica and Japan. In particular, imports to Japan are increasing rapidly. The recent trend inJapanese imports of wooden furniture is shown in Table 38.

Table 38 shows that Japanese imports from Asian countries increased by 48 percent from 1989 to1993, while the overall increase was only 17 percent. The formidable growth of Japanese imports ofwooden furniture from the main rubberwood producers Thailand (170 percent), Indonesia (241percent) and Malaysia (671 percent) is evident.



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Table 38 Japanese imports of wooden furniture by source (Million yen)

Country/Region 1989 1990 1991 1992 1993Asia 38,251 41,108 46,693 51,346 56,518Republic of Korea 5,052 5,187 4,463 3,699 3,547China 1,731 1,721 2,232 3,225 4,991Taiwan Province of China 17,049 14,467 14,353 13,945 12,562Hong Kong SAR, China 708 820 1,015 1,152 1,103Thailand 6,342 9,055 12,199 15,094 17,128Singapore 4,108 4,358 4,968 4,537 3,636Malaysia 634 1,359 2,397 3,403 4,886Philippines 177 269 329 403 496Indonesia 2,302 3,371 4,502 5,643 7,850India 73 109 89 98 35Others 75 93 115 147 286Europe 22,588 33,518 26,982 21,509 14,766North America 3,917 5,416 5,251 4,867 4,465Others 254 245 167 194 163Total 65,010 80,288 79,093 77,915 75,912

Note: all amounts are in million Yen. Source: MOF.



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It is estimated that two thirds of the world market for furniture is made up of industrializedcountries (Europe, the United States of America and Japan). There are several factors that explainthe growth of wooden furniture imports by the main consuming areas. This trend is likely tocontinue and probably accelerate in the short and medium term. The factors in favor of woodenfurniture imports include:

• increasing production costs in the furniture industries of the main consuming countries;

• low cost of imported furniture parts, which furniture producers can use in themanufacturing of their products;

• increased demand for low to medium priced wooden furniture;

• demographic changes (younger buyers no longer see furniture as once-in-a-lifetimepurchases and tend to buy cheaper furniture); and

• increasing demand for fitted furniture, which can be produced on an industrial scale andis easily transported in knockdown form.

Global furniture imports and exports are shown in Table 39 and Table 40. The percentage of totalfurniture imports accounted for by wooden furniture is not available for all countries, but it isestimated to be between 40-60 percent. Table 39 shows the recent strong growth of furnitureimports to the United States of America and Japan (the main markets for rubberwood furniture) andTable 40 shows that in recent years, exports of furniture from the main rubberwood producingcountries have grown strongly (61 percent in Malaysia, 56 percent in Thailand and 76 percent inIndonesia).

The trends in furniture imports and exports support the conclusion that rubberwood furniture hasbecome increasingly accepted in recent years. The upward trend in international demand forrubberwood furniture is likely to continue in the future in view of the high level of imports andpreference for low and medium priced wooden furniture in large consuming countries such as theUnited States of America and Japan.



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Table 39 World furniture imports in 1992-1995

Country 1992 1993 1994 1995United States of America 6,086 6,905 8,290 9,128Germany 6,333 5,007 5,580 6,584France 3,262 2,474 2,737 3,206Japan 1,741 1,933 2,677 3,155Canada 1,546 1,740 1,908 1,985United Kingdom 1,917 1,614 1,727 1,915Netherlands 2,148 1,458 1,611 1,857Belgium 1,794 1,340 1,546 1,776Switzerland 1,561 1,386 1,544 1,738Austria 1,135 1,100 1,245 1,455Hong Kong SAR, China 678 791 967 997Russian Federation 287 451 795 1,157Sweden 817 617 764 850Mexico 399 446 613 449Italy 706 537 582 699First 15 countries Total 30,410 27,799 32,586 36,951World Total 37,471 33,066 38,476 43,089Note: all amounts are in million US$. Source: CSIL processing of UN data.

Table 40 World furniture exports in 1992-1995

Country 1992 1993 1994 1995Italy 5,947 5,797 6,735 8,366Germany 4,878 4,090 4,356 4,882USA 2,983 3,309 3,729 3,806Canada 1,389 1,693 2,180 2,620France 1,935 1,649 1,808 2,080Taiwan Province of China 1,840 1,840 1,800 1,764Denmark 1,723 1,599 1,786 2,160Belgium 1,566 1,409 1,499 1,622China 825 1,083 1,496 1,765United Kingdom 1,153 916 1,109 1,338Sweden 997 850 1,014 1,391Poland 404 581 895 1,338Netherlands 1,124 877 878 959Mexico 481 659 851 897Indonesia 491 676 784 866Malaysia 394 566 769 916Spain 614 553 729 1,036Hong Kong SAR, China 432 569 709 770Thailand 486 594 708 757Austria 709 651 715 817Total ( 20 countries ) 30,371 29,961 34,550 40,150World Total 34,459 34,707 39,973 46,645

Note: all amounts are in million US$. Source: CSIL processing of UN data.



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The prospect for rubberwood furniture demand is less favorable in Europe because of competitionfrom low-priced furniture from Eastern Europe. In this area, rubberwood imports are mainlyconfined to rubberwood flooring (Netherlands and Germany). In addition, European imports offurniture, although the largest in terms of percentage of consumption, tend to be mainly from otherEuropean countries.

In Table 41, strong growth of imports from Eastern Europe can be observed. Imports from Asiagrew strongly at the beginning of the 1990s following the dislocation of industries in EasternEurope but has since slowed down considerably.

Table 41 The sources of European Union furniture imports 1990-1995

Country/Region Imports (in million ECU) Share % % change1990 1991 1992 1993 1994 1995 1990 1995 1990-95

Europe 9183.7 9944.5 10324.8 8272.2 9265.9 9340.2 93.4 86.9 1.7European Union* 8112.4 8746.2 8987.2 6786.2 7546.7 7276.7 82.5 67.7 -10.3West. Europe others 220.4 271.4 275.1 269.0 278.2 339.8 2.2 3.2 54.2Eastern Europe 850.9 926.9 1062.5 1217.0 1441.0 1723.8 8.7 16.0 102.6Africa 58.4 96.5 113.7 154.9 194.0 232.3 0.6 2.2 297.8America 147.7 185.1 238.4 305.2 321.9 316.8 1.5 2.9 114.5North America 128.1 151.1 170.5 184.2 191.8 178.0 1.3 1.7 39Central & South America 19.6 34.0 67.9 121.0 130.1 138.8 0.2 1.3 608.2Asia 379.7 562.2 645.5 781.0 823.0 857.0 3.9 8.0 125.7Middle East 43.5 48.2 59.2 58.3 64.6 79.3 0.4 0.7 82.3Central Asia 42.1 60.5 74.4 99.8 104.0 101.3 0.4 0.9 140.6Far East 294.1 435.5 511.9 622.9 654.4 676.5 3.0 6.3 130Oceania 1.4 2.5 2.6 2.2 2.5 2.1 0.0 0.0 50Unspecified 64.3 1.7 1.0 1.8 5.5 2.1 0.7 0.0 -96.7World 9835.3 10792.5 11326.2 9517.3 10612.7 10750.6 100.0 100.0 9.3

* All major producers/exporters. Denmark not included because data not available. Source: CSIL

The Chinese furniture industry produced US$ 8.8 billion worth of products in 1997, competition isincreasing and supplies of some varieties are outstripping demand. Domestic producers are facingincreased competition from imported products for which tariffs have been cut. Imported furniture in1997 was worth about US$1 billion. Domestic demand has increased at about 10 percent a year.While preferences in the North are for darker woods, southern China’s trend is towards the use oflighter species such as beech, birch, maple and pine. Many of these are imported from the U.S. andEurope. (FDM Asia, 1998)

At the global level, markets will not be an obstacle to growth for rubberwood furniture and furnitureparts. Wooden furniture markets are receptive to new products and new designs using rubberwood.In addition, there is a current positive perception about rubberwood. The positive perception amongmany buyers in Europe, Japan and the United States is the fact that rubberwood is obtained from arenewable resource. Furniture retailers may use this argument to point out the advantage of utilizinga hardwood that is not endangered and is being replanted. Furthermore, its extraction causes littlethreat to wildlife and, combined with latex production, it represents an efficient type of land use.This has become a distinct advantage for the marketing and acceptance of rubberwood products,especially in countries where environmental lobbies are strong.



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5.4 Export potential of rubberwood sawnwood

Malaysia was the first countries to utilize rubberwood at an industrial scale, starting with theproduction of sawnwood (mainly for export), which stimulated the development of the largerrubberwood industry. Some technological adjustments were needed in order to process rubberwoodsawlogs, which tend to come in smaller sizes and shorter lengths. The peak of rubberwoodsawnwood exports from Malaysia was reached in 1989 with 221,000 m3 exported, as previouslydiscussed in the footnotes to Table 18.

After the imposition of an export levy and quota in 1990, exports of rubberwood sawnwood fromMalaysia decreased rapidly. Rubberwood sawnwood exports were completely banned in 1994. Thelevy and subsequent ban were certainly successful in encouraging the further processing ofrubberwood. An analysis of export statistics, post levy and quota imposition, revealed that exportearnings from value added activities, particularly furniture exports, increased significantly. Morerecently, sawmillers and rubberwood suppliers have lobbied for the reinstitution of an export quota,claiming that stocks in excess of 140,000 m3 were a heavy burden on cost structures. In 1999,customs seizures of sawn rubberwood bound for Hong Kong and Taiwan were frequently reportedin the news.

The potential of sawnwood exports to Europe and the United States of America is relatively low,since further processing is relatively intensive-intensive, requiring a high degree of visual grading,collection of off-cuts and residues and sorting them for further processing in order to maximize theyields. This makes it very expensive to process rubberwood in these countries. Rubber producingcountries with nascent rubberwood industries, however, may be expected to make inroads intointernational sawnwood markets in the short to medium term. As the example of Malaysia shows,however, government policies to encourage domestic processing may well curtail such trade.



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6 CONCLUSION

The rapid establishment of rubberwood as an important wood product in furniture and furnituremanufacturing, as well as its increasing use in the wood-based panel industry has justifiably beencalled a ‘success story.’ While Malaysia has been at the forefront of this development, other rubberproducing countries in the Asia-Pacific countries have yet to make full use of their potential. Whatfollows below is a list of aspects that will impact on the development of rubberwood’s role to theyear 2010.

Factors contributing to a positive outlook for rubberwood include:

• Rubberwood’s properties, particularly its light color and easy machining will continueto make it a popular substitute for wood from increasingly scarce natural forest trees.Modern heat/steam/vacuum systems have largely mitigated the problems associatedwith the wood’ latex content.

• Environmental concerns in consumer markets will increasingly shift preferences towood products obtained from plantations. This will give rubberwood an advantage oversome of the more traditional tropical woods used in furniture and wood-based panelmanufacturing. Recent strides in rubberwood plantation certification confirm thisdevelopment. On the other hand, rubberwood has to be able to compete withincreasingly abundant softwood plantation species, particularly New Zealand pine.

• Where rubber tree planting programs are effective and economically accessible, rubberplantation areas can be maintained, as in Thailand, secure rubberwood supplies canprovide the investment security necessary for expanded rubberwood utilization. InThailand, for instance, potential sawlog and sawnwood availability is projected toincrease from 2.8 million m3 to 4.18 million m3 and 0.84 million m3 to 1.25 million m3

from 1997 to 2012, respectively.

Obstacles to increased rubberwood utilization comprise:

• Rubberwood’s susceptibility to insect and fungal attacks will continue to make iteconomically unviable for the majority of rubber producers. Increased accessibility willonly come with general socio-economic development, particularly in the transportationsector.

• Trends in the ownership structure indicate that an increasing share of rubber will beproduced by smallholders. Their difficulties in profitably utilizing rubberwood willlikely bring about shortages where demand outstrips what estates can supply. InMalaysia, for instance, where both estate and smallholding areas have been decliningsince the 1980s, sawlog availability is expected to decrease from more than 1.3 millionm3 in 2000 to less than 0.5 million m3 in 2010 and sawnwood availability from morethan 300,000 m3 to just over 100,000 m3. In Indonesia, estate areas have declining aswell, but improving current underutilization may compensate for the smaller volume ofmature trees available to 2010.

• Localized supply shortages and associated price developments may end rubberwood’scomparative advantage over other wood species. Since rubberwood comes in smallsizes, it is suitable for the wood-based panel industry. If Malaysia’s OSB trials become



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applied at larger scales, for instance, competition for rubberwood between furniture andpanel manufacturers may lead to further price hikes.

As has been indicated earlier, the relative lack of information makes more specific projectionsimpossible. It is to be hoped that the effort displayed in this article can serve as a motivation forfuture in-depth work.



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ANNEX A: NOMENCLATURE OF RUBBER TREE CLONES

Adapted from C.C. Webster & Baulkwill, 1989.

There is no official international registration authority for Hevea cultivars, but cooperation betweenbreeders and others in various countries has led to the general adoption of a system whereby a cloneis designated by letters indicating its place of origin and a serial number assigned to it by workers atthat place. Names of more than one word are abbreviated to the initial letters of each word incapitals without full-stop points between them, e.g. RRIM for Rubber Research Institute ofMalaysia. Single word names are abbreviated by giving the initial capital letter only, by two lettersif both are consonants, e.g. Ch for Chemara, or occasionally by three or more letters, e.g. Pil forPilmoor. Some exceptions to these conventions are in use, either because they are long established,or to avoid confusion between similar names such as Tjiomas and Tjirandji. A space is left betweenthe abbreviation of the name and the serial number. If the latter is prefixed or suffixed with a serialletter, this is run on with the number, e.g. Pil A44. Where a subdivision of a series is indicated by anumber, this is shown by an oblique stroke, e.g. PB 5/63. The following list gives the names andabbreviations of the places of origin of the better known clone series.

AVROS Algemene Vereniging Rubberplanters Oostkust SumatraBD Bodjong DatarCh CliemaraCt CultuurtuinFord FordFA Ford AcreFB Ford BelemFX Ford CrossGI GlenshielGT Godang TapenGyT Goodyear T seriesGyX Goodyear CrossHar HarbelHAPM Hollandsh Amerikaansche Plantage MaatschappijIRCI Institut des Recherches sur le Caoutchouc en IndochineIAN Instituto Agronomico do NorteLCB Lands Caoutchouc Bedrijven Lun LunderstonMDF Madre de Dios FirestoneMDX Madre de Dios CrossMAP Malayan American PlantationsNab NabutemmePPN Perusaha'an Perkebunan NegaraPil PilmoorPB Prang BesarPR Proefstation voor RubberRRIC Rubber Research Institute of Ceylon (Sri Lanka)RRII Rubber Research Institute of IndiaRRIM Rubber Research Institute of MalaysiaTR Terres RougesTjiomas TjiomasTjir Tjirandji



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WR Wanggo Redjo

Clonal seedling families

Most plantations of clonal seedlings are established with seed resulting from self or cross-pollination in isolated seed gardens which have been planted with clones of buddings selected fortheir ability to give high-yielding seedling families when crossed in all combinations. Seed collectedfrom a mixture of clones in such a garden is designated by letters indicating the name of the garden,e.g. PBIG/GG 1 for Prang Besar Isolated Seed Garden, Gough Garden 1. Seed collected frombudded trees of one clone in a polyclone planting is denoted by the abbreviation for that clone, e.g.PB 5/51 seed. Seed obtained from an isolated monoclone planting, i.e. resulting from selfing of, orcrossing between, budded trees of one clone, is designated by the abbreviation appropriate to theclone, with the suffix M for monoclonal, e.g. PB 5/51 M seed. Such seed may be useful for raisingrootstocks for budding.



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List of Working Papers already released

APFSOS/WP/01 Regional Study - The South PacificAPFSOS/WP/02 Pacific Rim Demand and Supply Situation, Trends and Prospects:

Implications for Forest Products Trade in the Asia-Pacific RegionAPFSOS/WP/03 The Implications of the GATT Uruguay Round and other Trade

Arrangements for the Asia-Pacific Forest Products TradeAPFSOS/WP/04 Status, Trends and Future Scenarios for Forest Conservation including

Protected Areas in the Asia-Pacific RegionAPFSOS/WP/05 In-Depth Country Study - New ZealandAPFSOS/WP/06 In-Depth Country Study - Republic of KoreaAPFSOS/WP/07 Country Report - MalaysiaAPFSOS/WP/08 Country Report - Union of MyanmarAPFSOS/WP/09 Challenges and Opportunities: Policy options for the forestry sector in the

Asia-Pacific RegionAPFSOS/WP/10 Sources of Non-wood Fibre for Paper, Board and Panels Production:

Status, Trends and Prospects for IndiaAPFSOS/WP/11 Country Report - PakistanAPFSOS/WP/12 Trends and Outlook for Forest Products Consumption, Production and

Trade in the Asia-Pacific RegionAPFSOS/WP/13 Country Report - AustraliaAPFSOS/WP/14 Country Report - ChinaAPFSOS/WP/15 Japan - In-depth country studyAPFSOS/WP/16 Country Report - Sri LankaAPFSOS/WP/17 Forest Resources and Roundwood Supply in the Asia Pacific Countries:

Situation and Outlook to Year 2010APFSOS/WP/18 Country Report - CambodiaAPFSOS/WP/19 Wood Materials from Non-Forest AreasAPFSOS/WP/20 Forest Industry Structure and the Evolution of Trade Flows in the Asia-

Pacific Region - Scenarios to 2010APFSOS/WP/21 Decentralization and Devolution of Forest Management in Asia and the

PacificAPFSOS/WP/22 Commentary on Forest Policy in the Asia-Pacific Region (A Review for

Indonesia, Malaysia, New Zealand, Papua-New Guinea, Philippines,Thailand, And Western Samoa

APFSOS/WP/23 Asia Pacific Forestry Sector Outlook: Focus On Coconut WoodAPFSOS/WP/24 Ecotourism And Other Services Derived From Forests In The Asia-

Pacific Region: Outlook To 2010APFSOS/WP/25 Technology Scenarios in the Asia-Pacific Forestry SectorAPFSOS/WP/26 In-depth Country Report - IndiaAPFSOS/WP/27 People and Forests: Situation and ProspectsAPFSOS/WP/28 Non-Wood Forest Products Outlook Study for Asia and The Pacific:

Towards 2010APFSOS/WP/29 Opportunities for Forestry Investment in Asia and the Pacific Through

Carbon Offset InitiativesAPFSOS/WP/30 Country Report - The MaldivesAPFSOS/WP/31 Country Report - Vietnam



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APFSOS/WP/32 Country Report - NepalAPFSOS/WP/33 Country Report - The PhilippinesAPFSOS/WP/34 Regional Study on Wood Energy Today and Tomorrow in AsiaAPFSOS/WP/35 The Status, Trends and Prospects for Non-Wood and Recycled Fibre

Sources in ChinaAPFSOS/WP/36 Outlook, Trends and Options with Special Reference to Legislation,

Institutions and Capacity Building (A Review for Bangladesh, Bhutan,China, Myanmar, Japan and Vietnam) (Draft)

APFSOS/WP/37 Perspectives of Environmental Civil Society Organizations on Forestry inthe Asia-Pacific Region: Outlook To 2010

APFSOS/WP/38 Summary Of The Country Outlook: Lao PDRAPFSOS/WP/39 Forestry and Key Asian Watersheds (Issued by ICIMOD as ISBN 92

9115 760 0)APFSOS/WP/40(a) FAO Outlook Study On Wood Based Panels Production, Consumption

And Trade In The Asia Pacific Region 1996 to 2010APFSOS/WP/40(b) FAO Outlook Study On Wood Based Panels Production, Consumption

And Trade In The Asia Pacific Region - 1996 To 2010 - China SectionStudy On China’s Wood-Based Panel Market Outlook For The Years2000-2010

APFSOS/WP/41 Scenarios For Extra- And Inter-Sectoral Developments Of ForestryOutlook Study For Asia And The Pacific

APFSOS/WP/42 Country Report - Forestry Of MongoliaAPFSOS/WP/43 Asia-Pacific Forestry Statistics Compendium (Draft):

Volume I - Socio-Economic, Resources and Non-wood ProductsStatisticsVolume II - Wood Products Statistics

APFSOS/WP/44 Urban Forestry in the Asia-Pacific Region - Situation and ProspectsAPFSOS/WP/45 Country report - IndonesiaAPFSOS/WP/46 In-depth country report - ThailandAPFSOS/WP/47 Review of Economic and Social Developments in the Asia-Pacific

Region with Projections to 2010APFSOS/WP/48 Country Report – BangladeshAPFSOS/WP/49 Review of Social and Economic Developments in the Asia-Pacific

Region with Projections to 2010APFSOS/WP/50 The Utilization, processing and demand for Rubberwood as a source of

wood supply

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