CAMBODIA: Rubber producers call for tax exemption after price falls

Despite rising exports of rubber, prices continue to plummet internationally and local producers say they are in danger of going out of business unless the government makes their product exempt from export taxes. 

Rubber’s price dropped dramatically last year, according to Men Sopheak, vice president of one of the biggest rubber producers in the kingdom, Chop Rubber Plantation in Tboung Khmum province. Sopheak said that while his company’s exports 7 % more rubber than it did in 2014, falling prices eroded profits. “The current rubber price is USD 1,030 per ton, but in 2014 the price was from USD 1,700 to USD 1,800 per ton,” he said, adding that prices fell due to slowing economic growth globally. Sopheak said a solution for rubber producers would be the removal of tax on exported rubber, adding that Vietnam does not impose such a tax. 

Raw rubber from Cambodia is exported to Malaysia, Singapore, South Korea, Taiwan, and Vietnam, where it is processed and then sold to companies that use it for manufacturing.

Rubber producer Lim Heng, chairman of the Lim Mean Investment Co. Ltd. – which has a 10,000 hectare plantation – said his company exports rubber to Vietnam. He said the Cambodian Rubber Association has requested an exemption from export taxes but has yet to receive a response. He said his plantation produces about 3,000 tons per year but is losing money because of declining prices.

Rubber plantations now cover more than 300,000 hectares of Cambodia and are expected to expand to 400,000 hectares by 2020.

Source: Daily “Khmer Times”, Phnom Penh; 13 Jan 2016
(Syed Rashid Ali, Karachi, Pakistan)