Industry workers have voiced serious concerns over the current rubber plantation sector in the Kingdom, with major companies in the market struggling to survive after 10 years of stubbornly low prices.
Lim Heng, vice-president of An Mady Group, a company that exports rubber products, explained: “This is not just an issue in Cambodia. Low prices are also effecting rubber markets in Malaysia and Thailand, one of the largest rubber suppliers in the world.”
Stressing, that the tit-for-tat trade war between China and the United States is a major factor in keeping the commodity prices low.
“The industry will most likely continue to face challenges with the uncertainty of global economic growth, ongoing trade wars and now a global health epidemic,” Lim added. He emphasised that currently the commodity is selling at around $1,300 per tonne and at these prices many local rubber plantations simply won’t be able to survive.
“The cost of production is currently higher than the price at which the product is being traded. The price needs to be trading at around $1,500 per tonne before businesses can see a profit,” Lim stated.
Currently, companies have to pay a $50 per tonne export tax. “We have recently issued a proposal to the government to consider lowering the current tax rate. But even with a reduced or removed tax, the commodity prices are simply too low across the international market,” Lim explained.
In 2019, the Kingdom exported nearly 300,000 tonnes of rubber, up 30 percent from the same period last year. Generating nearly $400 million in revenue, with the average price at $1,336 per tonne.