Cambodian rubber exports surge as the price of rubber drops

rubberCambodian rubber exports increased 22% during the first nine months of the year, compared to the same period last year, according to the Ministry of Agriculture.

Local producers exported 140,303 tonnes of rubber during the period, an increase of 25,240 tonnes compared to the previous year.

Pol Sopha, the director-general of the Rubber Department at the Ministry of Agriculture, said the price of rubber continues to decrease, with the average export price of natural rubber falling 18% each year to the current US$1,368 per tonne.It also decreased from US$1,434 per tonne in the first half this year, while the increase in exports is due to the higher production of the country’s produce.

However, Sopha expects that the price will increase in the next few years depending on the international market.

“The price is currently even lower than last year but has still not hurt the agricultural industry, where the rubber families are still profiting. Rubber is still a potential crop in Cambodia and not much riskier than others,” he said.

The total rubber cultivation is estimated to peak at450,000ha in 2025. Cambodia currently has a total of 427,000ha of rubber plantations, with 201,000ha being mature.

Sopha said the government is considering assisting local producers and exporters with ancillary help on tax payment facilities.

Association for Rubber Development of Cambodia president Men Sopheak said the current price is not profitable for producers.

“There is no choice. Rubber needs to be sold, no matter what the price, since there are no factories in the country to produce rubber products This price returns production costs, but it is not profitable yet for investment cost and is a loss for opportunity cost”.

The country’s industry is also subject to also smuggling across the Vietnamese border, incapacitating potential profits.

Cambodia generated about US$300 million in revenue by exporting nearly 189,000 tonnes of rubber last year, said the ministry’s report. The revenue boost was also helped by a 24% increase in the average price per tonne – up to US$1,586 last year – compared to US$1,283 in 2016.

In a report by the Phnom Penh Post, Memot Family Rubber Development Cooperative president Um Yin said that the current price was survivable but does not yield much profit.

“We can only handle production within labour costs. It is not much profit for us. The price only allows us to survive. We also have no choice besides being rubber growers”.