The global economic crisis has reduced Cambodia’s latex export earnings to $273.4 million in the first eight months of 2023, according to the Ministry of Agriculture, Forestry and Fisheries’ General Department of Rubber (GDR).
From January to August 2023, the total latex export to international markets was 205,167 tonnes, up 6,354 tonnes or three per cent compared to the same period in 2022 but its value dropped 10.2 per cent year-on-year from $304.4 million. The average global latex price for the period was $1,327 per tonne, which is 15 per cent or $230 lower than last year.
The price for latex in bulk (100 per cent dry rubber content, DRC 100%) was between 4,475 and 4,700 riel per kilogramme while cuplump latex (DRC 50%) costs 2,000 and 2,675 riel per kilogramme.
GDR director-general Him Oun told The Post on September 28 that the global economic crisis, which has prolonged for three years, has had a negative impact on the rubber market.
Low prices were due to reduced global demand, higher output, rising US Federal Reserve interest rates, the Russia-Ukraine war and Sino-US geopolitical dispute. “Because Cambodian latex depends on international exports, when the market has problems, the exports also suffer,” he said.
At the Cambodia Business Forum 2023 last August, Chea Vuthy, deputy secretary-general of the Council for the Development of Cambodia said the local tyre industry has shown remarkable growth, with two companies planning to set up shop here. Currently, there are three car tyre factories operating in Svay Rieng, Preah Sihanouk and Kratie.
He said local demand and latex prices would improve when the new companies start, as they can absorb local production. When all five companies are fully operational, absorption is estimated to be 200,000 tonnes of Cambodian latex per year. The local latex yield is around 500,000 tonnes per year but most are shipped to international markets due to low local demand.
Quoting figures by the Cambodian Rubber Plantation Association, Vuthy said the official latex export volume is about 300,000 tonnes, while unofficial export volume is around 200,000 tonnes. Cambodia earned more than $531 million from the export of latex and rubber wood last year.
Revenue from latex exports amounted to $527.8 million while rubberwood exports comprised $4.1 million.