CAMBODIA: Gov’t mulls suspending duty on rubber exports

The government will consider suspending its USD 50/t export duty on rubber following lobbying by local producers who say they are operating at a loss due to the sharp fall in global prices for the commodity, Agriculture Ministry secretary of state Eang Sophalleth said.

Sophalleth said officials at his ministry were drafting a report for the Cabinet and that action could be taken within a week. “The ministry is studying this in detail and will submit a report to [Cabinet] to take action,” he said. He said representatives of the rubber association had asked ministry officials for the export tax to be suspended because producers were going out of business.

Men Sopheak, vice president of Chop Rubber Plantation in Tboung Khmum province, said government intervention was necessary to prevent more producers from going out of business. “We contacted the ministry and the ministry is considering [our request] and will submit a proposal to the government to decide on the proposal [to suspend export duties],”Sopheak said.

Production costs are about USD 1,500/t and the current rubber price not much more than USD 1,000/t, Sopheak said. “Members of the private sector joined hands to submit a letter calling for action,” Sopheak said, adding: “If the government does suspend the export tax it will help rubber exporters and producers.”

The price of rubber was about USD 1,400/t on average last year, but has fallen below USD 1,050/t this year. It was USD 4,500/t in 2011.

Sopheak said previously that the rubber industry has been hit hard by the global plunge in prices. “We will wait and see whether the global market recovers,” he added.

The main markets for Cambodian rubber are Vietnam, China and Malaysia. Cambodia exported 152,160.25 t of dry rubber last year, up 55.5 % from 97,800 t in 2014, according to figures from the Ministry of Agriculture, Forestry and Fisheries. Most of this, 129,425.62 t, was exported to Vietnam, according to a report from the ministry.

Source: Daily “Khmer Times”, Phnom Penh; 22 Feb 2016
(Syed Rashid Ali, Karachi, Pakistan)