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Despite neighbours’ best efforts, price of rubber still unstable

Chea Vannak / Khmer Times Share:
Rubber is harvested from a tapped tree. KT/Ven Rathavong

With neighbouring nations supplying the internal rubber market regularly again, some industry insiders in Cambodia say the pledge made by Thailand, Indonesia and Malaysia in December to withhold exports has done little to alleviate rubber price woes in the kingdom.

In December, Thailand, Indonesia and Malaysia pledged to withhold exports of 350,000 tonnes of natural rubber until March during a meeting of the International Tripartite Rubber Council. The move was engineered to help the price of rubber recover in the international market.

Horn Saphon, director of market and international cooperation at the general directorate of rubber, said that, despite the regional effort, price of the commodity continues to be unstable.

“The scheme was meant to buoy the price of rubber, however, it has come to an end and the price of rubber is still unstable,” Mr Saphon said, adding that supply and demand are not as important in determining the price of rubber as it is commonly believed, and that there must be other factors at play.

Lim Heng, vice-president of rubber exporter An Mady Group, told Khmer Times that the price the commodity currently fetches in the international market makes it hard for farmers to make ends meet, and asked the government to eliminate the tax on rubber exports.

“Based on the current price, producers make a very small profit. Neighboring countries like Thailand or Vietnam enjoy tax exemptions, despite the fact that their labour costs in the sector are lower than in Cambodia,” Mr Heng said.

Cambodia has 436,340 hectares of rubber plantations, of which 170,230 hectares (39 percent) are now harvestable. The kingdom is the sixteenth largest latex producer in the world.

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