Cambodia Rubber Price Up

The price of rubber in Cam­bodia increased 30 percent in the first half of 2002 due to changes in the world market, officials said Wednesday.

“This is a huge jump compared to previous years,” said Ly Phalla, director general of the rubber dep­ar­tment for the Ministry of Agriculture.

Rubber prices were in serious decline from 1996 to 2001, reaching a low of $580 per ton, Ly Phal­la said. This year they have vaulted from $660 in January to $950 by early July, he said.

Cambodia exports 40,000 to 50,000 tons of rubber annually to other Asian countries, he said.

Several market factors have driven up prices, Ly Phalla said. First, the Association of Natural Rubber Processing Countries last year saw that rubber was flooding the market and instituted new quotas to reduce supply. The group’s member nations agreed to reduce latex production by

4 per­cent and exports by 10 percent. Thailand, Malaysia and Indonesia—the world’s top three rubber exporters—are members of the association, but Cambodia is not.

Further reducing supply, many planters in countries, such as Malaysia, have cut down their rubber trees and switched to easier-to-grow crops such as palm and cassava.

In addition, China’s accession to the World Trade Organization created a huge new market for rubber, Ly Phalla said. China could potentially import up to

1 million tons of rubber per year, he said.

With so much potential for exports, Cambodia, whose rubber plantations are joint state-private businesses, is looking to in­crease rubber production through family-run plantations.

Recently, 359 families collaborated to plant 1,000 hectares with rubber in Kompong Cham prov­ince. In this way, a big business benefits even lowly farmers, Ly Phalla said.

“I’m surprised at the remarkable rise in rubber prices this year,” said Mong Reththy, whose company, the Mong Reththy Group, is responsible for 60 percent to 70 percent of Cambodia’s rubber exports.

He said he expected prices to hold steady or even keep rising. “I don’t think the price of rubber will drop because countries like China will need a lot of raw rubber for processing,” he said.

 

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