Rubber price rise disappoints

The price of Cambodian natural rubber on the international market marginally rose to between $1,350 and $1,400 per tonne from the same time last year, largely undershooting expectations, industry insiders have said.

There were 404,701ha of natural rubber trees planted in the Kingdom as of the end of the first half of this year, the Ministry of Agriculture, Forestry and Fisheries reported.

Of this, 250,107ha are tapped for latex, while 154,594ha are in their immature phase and have yet to deliver their first harvest.

In the first half of this year, 97,936 tonnes of rubber was harvested, up 15,258 tonnes or 18 per cent compared to the first half of last year, while exports surged 17 per cent to reach 97,175 tonnes.

Heng Sreng, the general manager of rubber producer and exporter Long Sreng International Co Ltd, which has plantations in Kampong Cham province, told The Post on Monday that the $50 per-tonne increase in price from last year is paltry, resulting in stagnant growth in investment and cultivation.

And with cultivation in dire straits, he said, growers are cutting down rubber trees to plant more economic crops such as bananas, mangoes or other fruit.

“I had some older rubber trees cut down on the property and made room to plant bananas instead. We still have around 3,400ha of rubber left and now have more than 1,500ha of bananas,” Sreng said.

He said Chinese and Malaysian buyers typically shell out between $1,350 and $1,400 per tonne of the Kingdom’s top-quality natural latex.

Sopheak Nika Investment Agro-Industrial Plants Co Ltd director Men Sopheak said rubber shipments to Saigon Port in Ho Chi Minh City now average $1,360 per tonne.

He noted that concerns over price had punctured investment in natural rubber, resulting in narrowing cultivation area and capital.

“There’s been no growth in rubber cultivation area in the last two or three years – processing plants are suspending operations or outright closing up shop,” Sopheak said in a dejected tone.

Despite the Kingdom’s vast stretches of rubber plantations, he said, raw rubber sap predominantly goes unused and unprocessed domestically.

Pol Sopha, director general of the ministry’s General Directorate of Rubber, told a news conference at the Council of Ministers last week that Cambodia expects to export 300,000 tonnes of natural rubber to the international market.

He underscored that rubber output is generally highest in the last four months of the year.

He added that the price of the commodity had inched up from the beginning of the month to about $1,400 per tonne.

When asked about the mounting number of growers opting to plant other crops, Sopha said: “We are not very concerned about that – it hasn’t yet left a discernible effect [on the industry].”

He said natural rubber price reached a record high of more than $6,000 per tonne in March 2011, while the Cambodian variety was valued at more than $5,800.

But then the price plummeted until experiencing growth spurts as a rebound sparked in 2015, he said.

Vietnam, Singapore, Malaysia, China and the EU are the main markets for Cambodian rubber, he added.

Though the trees – also known by their botanical name Hevea brasiliensis – are native to the Amazon rainforest, 97 per cent of the world’s natural rubber comes from Southeast Asia, Honolulu-based research organisation East-West Center reported in 2014.

Rubber plantations covered 94,282sq km of the Southeast Asian highlands then, or eight per cent of the region, and could increase four-fold by 2050, it said.