Cambodian rubber exports increase despite declining global prices

The Cambodian General Directorate of Rubber under the Ministry of Agriculture, Forestry and Fisheries reported a 23% increase in rubber exports with an average price of US$1,279 per tonne for the first quarter of 2019–about US$61 million in revenue.

The President of the Association for Rubber Development of Cambodia (ARDC) Men Sopheak, has elaborated that the rise in exports is due to increasing rubber yields and market demand: “The number of mature rubber trees is increasing, so it results in more production for exports; rubber producers and farmers still need to sell stock and pay for production costs irrespective of decreasing rubber prices.”

While the global economy is slumping,Pol Sopha, Director-General of the General Directorate of Rubber, explains that rubber remains an agricultural product with greater potential over its labour costs, and the current fluctuating rubber prices depend on the international market: “If prices continue to decrease, it will be difficult for rubber producers and farmers. Currently prices are unfavourable for the industry, but are still stable for family-owned rubber plantations. The country needs factories to process raw material into finished products to maintain a sustainable rubber sector.”

To buck up the sector, the Council for the Development of Cambodia (CDC) recently approved a US$2.7 million rubber processing factory in Tbong Khmum province; Sopeak doubts that rubber prices will change for the better with rising global supply and failing demand, further estimating that dry rubber prices must be at least US$1,500-US$1,600 per tonne to be profitable for the industry.

Cambodia exported 217,500 tonnes of dry rubber in 2018, averaging US$1,319 per tonne, which denotes a jump of about 15% from 2017. The major destination markets for rubber exports from Cambodia are Vietnam, Malaysia, China and Singapore.