The world has seen an almost 70% drop in the price of natural rubber. Malaysia, being the world’s fifth largest producer and third largest exporter of this commodity has been especially hit hard by this decline. An article published by the Channel News Asia reports that across the northern Malaysian state of Kedah, abandoned rubber plantations are becoming a common sight.
According to some rubber tappers who have abandoned their plantations, the prices have fallen “too much, too low”, said Channel News.Each rubber cup lump fetches about RM0.50 (US$0.13), or RM2 per kilogram.The news report also says that rubber tappers want the government to set rubber prices at RM3 per kilogram and not fluctuate for three days.
But this is not the first time that the Malaysian Rubber Board has heard of complaints like this. Programs to help rubber tappers get by do exist, but to control rubber market prices is another matter altogether. According to Mohd Akbar Said, Director General of the Malaysian Rubber Board, when interviewed by Channel News, the country is overstocked with a supply of rubber and this has not helped the prices, as well as the falling oil prices.
Malaysia, along with other countries like Indonesia and Thailand, cut back rubber production between March and August 2016, while increasing rubber consumption at the same time. The Malaysia Rubber Board admits that without a surge in the global economy, a strong rebound in natural rubber prices is unlikely.
Instead, smaller rubber organisations should look into diversifying their revenue streams and moving into production or processing where possible. “We are not worried because the focus of the rubber industry from now onwards is more on rubber products and products which can fetch a higher price,” said Akbar.
Source: Channel News Asia