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07. September 2017

MYANMAR: Japan, Singapore to tap into Mon State rubber

Japan and Singapore have expressed interest in buying rubber from Mon State if local firms are able to produce a sufficient supply of export-quality rubber, according to the Mon State Rubber Planters and Producers Association (MRPPA).

“Singapore negotiated to buy rubber from us on 1 September 2017, and Japan also talked about buying rubber during the Mon State Chief Minister’s recent visit to Japan. If we can produce the amount they want, we can reach the world market,” said MRPPA central executive committee member U Thet Oo.

Now, local rubber businesses are looking to band together to build higher-quality rubber factories with the help of state subsidies in all ten of the state’s townships, which will help smaller firms produce a greater supply of export-quality rubber.

Mon State produces about half of Myanmar’s total rubber output, but most of it is low-quality raw rubber that is sold to Chinese buyers at low prices. Myanmar’s rubber industry has suffered due to low productivity and inferior quality produce since privatization in 2005.

Rubber prices are also increasing globally, according to U Thet Oo, and are up from MMK 840 per pound in July.

“The current price for RSS1 quality in Mudon is above MMK 900. The price is between MMK 920 and MMK 950,” he said, referring to higher-quality ribbed smoked sheets (RSS) of rubber.

But there is more money to be made, according to Mon State Chief Minister Dr Aye Zan. During an industry development meeting last month, the chief minister claimed a MMK 200 per pound gap between the global rubber price and domestic rubber prices leads Myanmar to fetch USD 300 per ton and USD 30 million (MMK 40.7 billion) per 100,000 tons.

“We could build many schools, hospitals and roads [with that additional income]. The yearly budget of the Mon State is only MMK 68 billion,” Dr. Aye Zan said.

Rubber entrepreneurs expect to rely on state subsidies bank loans. At the meeting, Dr. Aye Zan outlined a cost-sharing agreement that would see private companies contribute MMK 80 million and the government MMK 120 million to build high-quality rubber factories.

Currently, rubber factories are being developed in Kyaikmaraw and Paung townships, with facilities planned for Thaton, Mudon, Thanbyuzayat, and Ye townships.

Mon State has around 500,000 acres of rubber plantations, of which 300,000 acres are producing rubber, according to MRPPA.

Source: Daily “Burma News International” (BNI), Yangon; 7 Sept 2017

(Syed Rashid Ali, Karachi, Pakistan)

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