Malaysia’s Sabah Rubber Industry Board (SRIB) worried over low rubber prices

February 12, 2018

rubberSabah Rubber Industry Board (SRIB) general Manager Datuk Harris Mathews has expressed his concern over the falling rubber prices, adding that this has made many smallholders feel uncomfortable.

He said SRIB was very concerned about the current low price of rubber and its impact on the income of rubber smallholders and rubber tappers.

“However, the low price of rubber in the international market is a result of the slowdown in the global economy.

“The price of international grade SMR20 has fallen from RM9.57 per kilogram in January 2017 to RM5.80 per kilogram in December 2017. Today, it continues to fall low to RM5.73 per kilogram,” he said in his speech at the presentation of  Monsoon Season Aid (BTM) to smallholders in the Pensiangan parliamentary constituency at Sook Community Hall here yesterday.

Minister in the Prime Minister’s Department and Pensiangan member of parliament, Tan Sri Joseph Kurup officiated at the event.

In order to mitigate the impact of falling rubber prices on earnings of rubber smallholders, he said the government had implemented two major initiatives ie introducing Rubber Production Incentives (IPG) and BMT.

Harris said IPG was first introduced in 2015 and paid to smallholders when the monthly average price of rubber grade 2 at the farm level was below the floor price of RM2.20 per kilogram.

In brief, he explained that IPG was the difference between the floor price set with the actual average monthly price of rubber and will only be paid to the rubber smallholders registered  with SRIB.

He said BMT was the aid given to rubber smallholders who were eligible to alleviate their financial burden as a result of the arrival of the monsoon season. Assistance is given in cash amounting to RM200 per month paid for three  months, in November to December 2017 and January 2018.

Harris yesterday said as many as 200 smallholders would receive their assistance and those who had not received the BMT could get it at the SRIB counter that would be open in conjunction with the event.

“I would also like to convey the good news that the Federal Government will continue offering the BMT in November and December this year as well as in January 2019. Of which 1,723 smallholders in Nabawan district and 7,173 in the Keningau district including Sook will receive BMT which involves expenditure of RM5.4 million.

“I would like to draw attention to the difference in rubber prices at the farm level in Sabah compared to Peninsular Malaysia. The difference in prices is due to the absence of overseas carriers coming to the port of Sabah with fixed schedules that caused:

“All rubber processed in Sabah should be sent to Klang Port in Peninsular or Singapore before being sent to overseas buyers.

“Sabah’s position, located within 1,900 km further from Peninsular or Singapore, also involves additional shipping costs which cause exporters in Sabah to bear additional shipping fares as compared to factories located in the peninsula,” he said.

In addition, he said, rubber processing costs in Sabah were significantly higher than in Peninsular because of packaging materials, spare parts of machinery, chemicals and processing machines needed to be imported from the Peninsular which involved the cost of additional shipping fares that directly made the price higher.

Furthermore, he said, the price of industrial diesel and the price of natural gas required for drying of rubber during processing was higher in Sabah than in the Peninsular. Where, this additional cost is about RM0.50 per kilogram for every one kilogram of rubber processed and exported from Sabah.

Harris asked the smallholders to thank the Chief Minister who was deeply concerned about the problems faced by rubber smallholders in the state, where, the state government has approved an allocation of RM24.0 million to cover additional costs.

He said t with the allocation channelled through SRIB, smallholders would get an additional rubber price of 60 sen per kilogram for 100%  dry rubber content sold to SRIB from 1 January this year.

According to him, the additional rubber price is set; Latex RM0.60, Rubber Sheet (USS) Grade 1 (RM0.38), Rubber Sheets (USS) Grade 2 (RM0.32), Cuplump Grade 1 (RM0.36)  and Cuplump Grade 2 RM0.30

“SRIB will continue to assist smallholders to implement rubber replanting and new planting by subsidizing RM14,000 per hectare and up to now, SRIB has planted 2,028 hectares with Government allocation of RM24.0 million in Nabawan district and 2,192 hectares with an expenditure of RM24.3 million in the Keningau district under the rubber NKEA program from 2012 to 2017.

“Overall, there is an area of 13,342 hectares of rubber plantations in these two districts at with cost of RM95,991 per day on average for the purchase of rubber.

“SRIB owns a nursery unit located in Pamalan Keningau which produces 233,260 rubber seedlings with a return of RM1.2 million a year,” he said.

In addition, he said, SRIB has also developed a Rubber Settlement  Scheme at TulidKeningau which has successfully assisted 26 settlers to own 10 acres of land lots as well as a home for every family that aims to provide a comfortable life.

According to him, in the districts of Nabawan and Keningau including Sook, SRIB has placed 117 staff who are always ready to provide the best services to rubber smallholders.

(RJA)


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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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