CAMBODIA: Low China demand may keep local rubber prices down until 2015

Mak Kimhong, president of the Cambodia Rubber Association and owner of Chhop Rubber Plantation in Kampong Chham, said the rubber price has declined by nearly half from the middle of the year until now and will fall further to US$2,500 per tonne by the end of 2013.

“Now, we don’t see the demand from China as a lot of their exports go to the United States and Europe which is also in decline,” he said.

“I think it [the price] will continue to fall down because now the price per tonne is $2,700,” he added, noting that China accounts for 20 per cent of the world’s rubber consumption.

According to data from the Ministry of Commerce, the country exported 39,360 tonnes of rubber latex from January to September this year, up 12 per cent from 35,080 tonnes during the same period last year.

The data also showed that despite the increase in exports, revenues decreased from last year by 27 per cent to $116 million from $160 million.

Ly Phalla, director general of the Cambodian Rubber Department, said during a workshop on enhancing Cambodia’s natural rubber industry that by 2015, Cambodia forecasts rubber production will have increased by 100,000 tonnes for export.

Although the country’s output production will have doubled by 2015, the rubber market will be no problem, said Mak Kimhong.

“In fact, the demand can be higher than the supply whenever there is demand from the tyre industry in the US,” he said.

Mak Kimhong also said that in upcoming years, the supply will slow as Indonesia has cut old rubber plantations by 20,000 hectares per year to plant new trees while Malaysia will switch from planting rubber to palm oil trees.

According to Ly Phalla, Cambodia currently has 55,000 hectares of rubber plantations, producing 65,000 tonnes.

The Cambodian government’s goal is to eventually increase total plantation areas to 300,000 hectares, which will produce about 290,000 tonnes by 2020, he said.

Source: Daily "The Phom Penh Post", Phom Penh; 6 Dec 2012

(Syed Rashid Ali, Karachi, Pakistan)