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Rubber exports up, but shippers see revenue loss

Sok Chan / Khmer Times Share:
A man pours latex into a container at a rubber plantation. KT/Mom Sophon

Despite an increase in shipments, Cambodia earned less than $287 million from dry rubber exports last year, a decrease of 4 percent year-on-year caused by lower prices.

In 2018, Cambodia exported 217,500 tonnes of dry rubber, a jump of about 15 percent compared to 2017, according to a report released on Monday by the General Directorate of Rubber.

However, the same report highlights that the average price of the commodity fell to $1,319 per tonne, resulting in a revenue drop of 3.9 percent.

Pol Sopha, director general of the General Directorate of Rubber, says in the report that the total number of rubber plantations in the country is 436,682. Of those, 201,949 were harvested in 2018.

Mr Sopha said Cambodia produced about 220,100 tonnes in 2018, and exported about 217,500. Most of those exports went to Malaysia, Vietnam, Singapore, and China.

Earlier this month, the Ministry of Agriculture announced it is working on a proposal to reduce taxes on rubber exports to attract more investors.

Agriculture Minister Veng Sakhon said one of the points included in the proposal is that shipments valued at less than $2,000 per tonne should not be taxed.

The government now levies $50 in tax duty per tonne of rubber exported if it is priced between $1,000 and $2,000 per tonne. $100 is charged if the value exceeds $2,000 per tonne. Shipments of rubber valued at less than $1,000 per tonne are not taxed.

The ministry’s proposal seeks to appease players in the rubber industry, who for years have demanded that the government reduce taxes to bring down production costs. It will be submitted to Prime Minister Hun Sen in the near future, the minister said.

Lim Heng, vice-president of An Mady Group, a company that owns rubber plantations in the Kingdom, welcomed the move.

“If approved, this proposal will help the rubber sector a lot by reducing production costs. Right now, we are working with very small profit margins,” Mr Heng said. “Revising taxes on rubber exports will help companies in the sector survive.”

Recently, the government announced the elimination of several district-level agencies as well as the Kampuchea Shipping Agency and Brokers, also known as Kamsab, in a bid to reduce costs for businesses and make Cambodian products more competitive.

“Soon we will remove the bureaus of some ministries at the district level,” Prime Minister Hun Sen said last Friday. “We will keep those agencies associated with the military, police, health, education and urban management. The rest will be removed and combined into a single agency.”

The premier also said Kamsab, an agency of the Ministry of Public Works and Transport, will be eliminated to cut down expenses and red tape for traders.

“Kamsab is responsible for a loss of around $500,000 per year for Cambodians. Removing it will make our economy more competitive and facilitate trade,” Mr Hun Sen said.

“This type of reform will help our national economy grow more efficiently,” he added.

The government had previously announced the removal of Camcontrol officials from border checkpoints.

The measures follow an announcement by the government earlier this month that it has adopted a new strategy to boost economic self-reliance by reducing costs for businesses.

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