{"id":90583,"date":"2024-08-21T10:21:34","date_gmt":"2024-08-21T13:21:34","guid":{"rendered":"https:\/\/murray.adv.br\/?p=90583"},"modified":"2024-08-21T10:21:36","modified_gmt":"2024-08-21T13:21:36","slug":"tire-imports-surge-straining-brazils-natural-rubber-producers","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/tire-imports-surge-straining-brazils-natural-rubber-producers\/","title":{"rendered":"Tire imports surge, straining Brazil\u2019s natural rubber producers"},"content":{"rendered":"\n
Low prices drive growers to abandon rubber; in S\u00e3o Paulo, the leading producer, sugar cane encroaches on rubber lands<\/strong><\/em><\/h6>\n\n\n\n

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08\/21\/2024 <\/p>\n\n\n\n

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Imports of cargo and passenger tires in Brazil surged by 117%, from 16.9 million to 36.8 million units between 2017 and 2023. This steep increase has sparked a crisis in the domestic tire industry, exerting immense pressure on the natural rubber production chain. Historically, Brazil was a leader in natural rubber and was once the world\u2019s top producer and exporter.<\/p>\n\n\n\n

As a result of the crisis, producers have been abandoning their rubber plantations; some have even uprooted trees to switch to more lucrative crops like sugar cane, particularly in S\u00e3o Paulo, which is the leading state for natural rubber production. Industry estimates predict a decline of 15% to 20% in the national rubber crop for the 2023\/24 season.<\/p>\n\n\n\n

Data from the Institute of Agricultural Economics of the State Department of Agriculture (IEA-SP) indicates a reduction in the cultivated area from 115,200 hectares in 2022\/23 to 113,300 hectares in 2023\/24 in S\u00e3o Paulo, which represents over 60% of the country\u2019s output. This marks a significant downturn, with production in the state dropping from 282,100 tonnes to 273,500 tonnes over the same period.<\/p>\n\n\n\n

\u201cThis is unprecedented since the crop was introduced in the state,\u201d notes Marli Mascarenhas, a researcher at IEA-SP. \u201cThe combination of low prices and producers\u2019 lack of capital for reinvestment has significantly impacted the rubber sector,\u201d she explains.<\/p>\n\n\n\n

Ms. Mascarenhas adds that the surge in tire imports in recent years has led to overflowing stocks at mills, causing industries to halt purchases of approximately 120,000 tonnes of rubber directly from the fields, which has further driven down prices.<\/p>\n\n\n\n

For the first time ever, growers found themselves unable to sell their crops at viable prices, necessitating government intervention to alleviate some of the financial strain.<\/p>\n\n\n\n

Jos\u00e9 Fernando Canuto Benesi, head of the Brazilian Association of Natural Rubber Producers (ABRADOR), expresses his concern: \u201cSome producers are resorting to cutting down their rubber plantations to eradicate the plants and exit the industry. It\u2019s a chaotic situation for the entire chain, and it desperately needs governmental intervention to be salvaged.\u201d<\/p>\n\n\n\n

Currently, rubber plantations cover 257,000 hectares across Brazil, with 163,000 hectares actively in production. While official harvest data for the last two seasons remains unavailable, in 2022, Brazil produced 416,900 tonnes of natural rubber, valued at R$1.8 billion, as reported by the Brazilian Institute of Geography and Statistics (IBGE).<\/p>\n\n\n\n

August marks the off-season for rubber production. The tapping, performed by workers known as \u201cbleeders,\u201d commences in September, signaling the start of the harvest season. By October, the harvested rubber begins to reach the processing plants.<\/p>\n\n\n\n

The local industry and producers have raised concerns about the influx of imported tires, particularly from Asia, labeling it as \u201cunfair competition.\u201d Stakeholders within the sector argue that these imports are priced below both the cost of local production and international market rates. This pricing strategy has led to decreased sales for domestic companies, resulting in overstocked factories and approximately 2,500 workers currently on leave due to reduced operational demands.<\/p>\n\n\n\n

The tire industry, which accounts for 80% of Brazil\u2019s rubber consumption, has sought governmental intervention. The sector is advocating for an increase in the import tax on tires from 16% to 35% for a period of 24 months, a proposal set for deliberation next week by the Foreign Trade Chamber (Camex).<\/p>\n\n\n\n

Additionally, manufacturers are urging the government to reinforce current anti-dumping measures and to take action on three specific fronts: countering subsidies provided by exporting countries, preventing the falsification of origin and product triangulation, and restricting the entry of tires priced below production costs by scrutinizing the reference price upon import.<\/p>\n\n\n\n

From 2017 to 2023, a period during which imports surged by 117%, domestic tire sales saw an 18% decline. Concurrently, the volume of natural rubber in imported products more than doubled, rising from 55,900 tonnes to 125,100 tonnes. This increase represents the volume of foreign raw material that has directly competed with Brazilian rubber.<\/p>\n\n\n\n

In the first half of this year, imported tires held a more significant market share (54%) than local production (46%) despite no decrease in the production of load and passenger tires in Brazil. This is because the costs associated with idling the industry are prohibitively high.<\/p>\n\n\n\n

A study conducted by LCA Consultoria Econ\u00f4mica, commissioned by Brazil\u2019s National Association of the Tire Industry (ANIP), revealed that in 2023, imported cargo tires were brought into Brazil at an average cost of $2.9 per kilo, significantly below the international average of $4.2. In Brazil, the prices were 69% lower than the global average.<\/p>\n\n\n\n

Klaus Curt M\u00fcller, executive director of ANIP, criticized this disparity, stating, \u201cThis absurd variation shows that Asian countries are exploiting Brazil\u2019s lack of tariff protection to dump their products at unfair prices. The world market has grown while domestic companies have contracted.\u201d<\/p>\n\n\n\n

In contrast, countries like the United States and Mexico have substantially increased tax rates in recent years to shield their domestic industries. In Brazil, however, the rate was initially set at zero and was only raised to 16% in 2023, which proved ineffective. Fernando do Val Guerra, executive director of ABRABOR, expressed concern about the future of the industry, remarking, \u201cIf this industry dies, we will die together.\u201d<\/p>\n\n\n\n

*Por Rafael Walendorff, Globo Rural\u00a0\u2014 Bras\u00edlia<\/p>\n\n\n\n

Source: Valor International<\/p>\n\n\n\n

\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Low prices drive growers to abandon rubber; in S\u00e3o Paulo, the leading producer, sugar cane encroaches on rubber lands 08\/21\/2024 Imports of cargo and passenger tires in Brazil surged by 117%, from 16.9 million to 36.8 million units between 2017 and 2023. This steep increase has sparked a crisis in the domestic tire industry, exerting […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[25382,25381],"class_list":["post-90583","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-straining-brazils-natural-rubber-producers","tag-tire-imports-surge"],"yoast_head":"\nTire imports surge, straining Brazil\u2019s natural rubber producers - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/tire-imports-surge-straining-brazils-natural-rubber-producers\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tire imports surge, straining Brazil\u2019s natural rubber producers - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Low prices drive growers to abandon rubber; in S\u00e3o Paulo, the leading producer, sugar cane encroaches on rubber lands 08\/21\/2024 Imports of cargo and passenger tires in Brazil surged by 117%, from 16.9 million to 36.8 million units between 2017 and 2023. 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