Japan, Singapore show interest in buying rubber from Myanmar’s Mon State

September 8, 2017

rubberJapan and Singapore have shown interest in purchasing rubber from Mon State in Myanmar, given that local firms will be able to produce sufficient supply of export-quality rubber, according to the Mon State Rubber Planters and Producers Association (MRPPA).

“Singapore negotiated to buy rubber from us on September 1 , and Japan also talked about buying rubber during the Mon State Chief Minister’s visit to Japan. If we can produce the amount they want, we can reach the world market,” said MRPPA central executive committee member U ThetOo.

Now, local rubber businesses are looking to band together to build higher-quality rubber factories with the help of state subsidies in all ten of the state’s townships, which will help smaller firms produce a greater supply of export-quality rubber.

Mon State produces about half of Myanmar’s total rubber output, the Irrawaddy reported last month, but most of it is low-quality raw rubber that is sold to Chinese buyers at low prices. Myanmar’s rubber industry has suffered due to low productivity and inferior quality products since privatization in 2005.

Rubber prices are also increasing globally, according to U ThetOo, and are up from K840 per pound in July.

“The current price for RSS1 quality in Mudon is above K900 (Myanmar Kyat). The price is between K920 and K950,” he said, referring to higher-quality ribbed smoked sheets (RSS) of rubber.

But there is more money to be made, according to Mon State Chief Minister Dr. Aye Zan. During an industry development meeting last month, the chief minister claimed a K200-per-pound gap between the global rubber price and domestic rubber prices leads Myanmar to forfeit US$300 per-tonne and US$30 million (K40.7 billion) per 100,000 tonnes.

“We could build many schools, hospitals and roads [with that additional income]. The yearly budget of the Mon State is only K68 billion,” Dr. Aye Zan said.

Rubber entrepreneurs expect to rely on state subsidies bank loans. At the meeting, Dr. Aye Zan outlined a cost-sharing agreement that would see private companies contribute K80 million and the government K120 million to build high-quality rubber factories.

Currently, rubber factories are being developed in Kyaikmaraw and Paung townships, with facilities planned for Thaton, Mudon, Thanbyuzayat, and Ye townships.

Mon State has around 500,000 acres of rubber plantations, of which 3000,000 acres are producing rubber, according to MRPPA.

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International Rubber Prices

Monthly The prices shown above do not include VAT @4% on purchase and expenses towards packing, transportation, warehousing  and other incidentals

Source: India Rubber Board


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