Heads Meet to Save Regional Rubber Industry

Cambodian rubber industry representatives met with Asia’s major exporters of the commodity last week to set a floor price for natural rubber in an effort to salvage an industry suffering from plummeting values.

Representatives from Thailand, Indonesia, Vietnam, India, Sri Lanka, the Philippines and Papua New Guinea met in Malaysia and agreed not to sell rubber below $1,500 per ton, said Men Sopheak, secretary-general of the Association for Rubber Development in Cambodia.

The move will hopefully give those in Cambodia’s rubber industry, which has seen many producers abandon the trade of late due to shrinking profits, more incentive to continue production, he said.

“Currently, workers and companies involved in rubber production have less and less interest in their businesses and have moved into other industries such as construction, garments and growing pepper,” Mr. Sopheak said.

“If the price of rubber goes below the floor price, it could lead to no more production of rubber in the country,” he added.

Cambodia’s rubber sector has mirrored a worldwide decline in rubber prices, which fell to a five-year low this month due to global oversupply and slowing demand from China, the world’s largest importer of the commodity.

In the first six months of the year, Cambodia exported 42,189 tons of dry rubber, according to Ministry of Commerce data, up 42 percent compared to rubber exports during the first half of 2013. However, the commodity’s export revenue during this year’s period was down nearly 2 percent year on year, from $76.5 million to $75 million.

Chea Sayim, president of Memot Family Rubber Development Association in Kompong Cham province, said the price per kg for dry rubber sold to local dealers in the past three months has fallen by 600 riel to 4,000 riel, or less than $1,000 per ton.

Mr. Sayim said some farmers have resorted to desperate methods to boost their income.

“A lot of people now don’t follow the technical guidelines to produce rubber because they need income to support their families,” he said.

“To get resin more quickly to sell, they paint their rubber trees once every half month, not every 2 or 3 months like before,” he said, adding that some big plantations have completely suspended operations this year.

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