Lic. Diogo Esperante (Planthec) – CEO APABOR and Director de el Comité de Plantaciones SLTC
Dr. Juan Sierra (Rubber Route) – Miembro del Comité de Plantaciones SLTC
The current outbreak of COVID-19 disease, which was first identified on December 31 in the city of Wuhan (China), paralyzed China due to extensive quarantine measures and today, March 21 of this year, according to the World Organization of Health (WHO), the disease has spread in approximately 184 countries, infecting some 267,013 people and taking the lives of more or less 11,201.
On March 21, 24,483 cases of infection and 292 cases of death have been confirmed in the Americas region. In Latin America, on February 26 the first case was reported in Brazil, and today according to the WHO Brazil presents 814 cases of infected and 4 cases of death. The rest of Latin America also quickly registered cases and thus they all began to implement restriction measures.
The COVID-19 pandemic is generating a serious economic crisis in the world, since implemented isolation or quarantine measures caused the interruption of commercial and industrial activities, negatively impacting production, consumption and investment. This severity of COVID-19 is also reflected in negative shocks in world supply and demand, in addition to having enormous pressure on resources in the health areas, due to the enormous growth of the disease,.
With all this scenario, the perspective is that the COVID-19 pandemic prevents the recovery of the global economic projected previously for 2020. In this context, it is necessary to prioritize the immediate objectives of the fight against the pandemic and the control of it’s effects on economic activity.
As far as Latin-American is concerned, on March 20, 2020 in Brazil, tire companies [the largest consumers of technically specified granulated rubber (TSR-10) in Brazil] such as: Pirelli, Prometeon and Goodyear confirmed the closure of the factories and suspension of TSR-10 deliveries. This led to the paralysis of the country’s processing plants and, as a consequence, the restriction of purchases of cup-lumps by small, medium and large producers. Similarly, other companies are about to announce the total closure of their factories, which means a possible shutdown in the sector.
In Brazil, there are approximately 30.4 thousand people related to the production of natural rubber (MBAGRO, 2019) with an annual production of 185 thousand tons of dry rubber per year (IBGE, 2018). Thus, the most worrisome thing is how to maintain the income (salary) of the tappers, since once the purchases are interrupted, the crisis will manifest itself in the farms. If we project their income between March, April and May, we could be considering losses of USD17.9 million (Table 1.) for these workers. Taking into account their direct relatives (an average of 3 people per household), we would be talking about 100,000 people.
To understand the gravity of the Brazilian situation a little better, compared to the other natural rubber producing countries in the region, we have to look at the annual distribution of production (Figure 1, 2). For Colombia, Guatemala and Mexico, now is the period of rest or stop of production, contrary to Brazil, which is currently at the beginning of the peak (high) of production.
Table 1. Monthly distribution of production, turnover and income of workers in Brazil
Figure 1. Annual Distribution of Brazilian Production.
Figure 2. Annual Distribution of Production in Colombia, Guatemala y México.
Without access to credit lines, which are being hampered by financial institutions, the primary sector needs to find outlets to keep production stable, as well as a minimum of income or subsistence conditions for workers. To this end, the Association of Producers and Processing Plants of the State of São Paulo (APABOR) is looking for alternatives with government and other agents in the industry to help the Productive Chain to maintain it self on line.
MBAgro 2019 – “A Cadeia da Borracha no Brasil”. Câmara Setorial da Borracha Natural CSBN, Ministério da Agricultura Pecuária e Abastecimento MAPA, Setembro 2019 – Brasil
Esperante, 2019. “The Potential of added value strategies to aid Latin America NR industry in challenging the limitations of secular decline of commodity prices”. XV Jornadas Latinoamericanas de Tecnología del Caucho. Querétano, México, 2019.
Sierra-Hayer, 2019. “Cuidados Fitossanitários com a Seringueira”. X Simpósio Estadual Sobre Seringueira”. Pinheiros – ES – Brasil, 2019.
Organización Mundial de la Salud (OMS) https://www.who.int/emergencies/diseases/novel-coronavirus-2019