MALAYSIA: Tappers hit hard by natural rubber price drop

As the world’s fifth biggest producer and third largest exporter of natural rubber, Malaysia has been hit especially hard by a decline of almost 70 per cent in the price of natural rubber.

Across the state of Kedah in northern Malaysia, abandoned plantations are becoming a common sight.

Abdullah Ahmad, a rubber tapper who abandoned his plantation, told Channel News Asia that prices have fallen “too much, too low” for him to continue tapping. Each rubber cup lump fetches about RM0.50 (USD0.13), or RM2 per kilogram.

“I ask the government to set rubber prices at RM3 per kilogram,” said Ibrahim Ismail, a plantation co-owner. “Then there’ll be enough (for us) to eat.” This is not the first time the Malaysian Rubber Board (MRB) has heard of such complaints. According to them, programs do exist to help rubber tappers get by, but it is another matter altogether to be able to control rubber prices.

"The world market is governed by so many factors,” said Mohd Akbar Said, Director General of the MRB. “We have overstock, we have issues of oil price, economic situations of rubber consuming countries and the production of rubber from all the rubber producing countries in the world."

Malaysia was among countries such as Thailand and Indonesia that cut back rubber production between March and August 2016, while increasing rubber consumption at the same time. Yet the MRB admits that a strong rebound in natural rubber prices is unlikely without a surge in the global economy. Instead, smaller rubber organizations 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 onward is more on rubber products and products which can fetch a higher price,” said Akbar. Such products include condoms as well as rubber gloves, a market which Malaysia currently dominates.

Source: “Channel News Asia”, Singapore 17 Apr 2016
(Syed Rashid Ali, Karachi, Pakistan)