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Exports of rubber up, but prices on the fall

Exports of rubber up, but prices on the fall

Despite a large increase in exports during the first quarter, natural rubber producers continue to see declining revenues, as world prices fall further.

The latest figures from the Ministry of Commerce show natural rubber exports grew 26 per cent during the first quarter of 2014, compared with the same period last year.

Meanwhile, overall revenue from natural rubber sales fell 28 per cent.

“Last year, rubber was selling at about $2,800 per tonne, but early this year, surprisingly, the price has dropped to as low as $1,980 per tonne,” Heng Sarath, deputy director of the General Directorate of Rubber, said, adding that prices had been on the decline since 2011.

Sarath said he could not foresee an end to the sector’s price slump, citing a slowdown in global demand for natural rubber, in particular China’s car tyre manufacturing industry.

Srey Chanthy, an independent economist, said a lack of infrastructure meant Cambodia had little choice but to sell natural rubber straight to the market despite falling prices.

“The reason exports are increasing [despite low prices] is because Cambodia does not have processing plant or warehouse to stock the harvested rubber,” he said, while agreeing that the Kingdom’s skilled labour shortage may deter investment in such
infrastructure.

Cambodia produced 85,000 tonnes in total of raw natural rubber in 2013.

“I believe when Cambodia could produce 400,000 tonnes of nature rubber, there will be investors who will consider investing in a processing plant,” Men Sopheak, deputy director general of Chop Rubber Plantation, said in April.

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