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Rubber outlook bleak despite price bounce

Sap collects from a rubber tree in Kampong Cham province in February.
Sap collects from a rubber tree in Kampong Cham province in February. Hong Menea

Rubber outlook bleak despite price bounce

Despite an initial rebound in global rubber prices, Cambodian rubber farmers predict a bleak year as production and exports have increased while profits continue to suffer.

Cambodia’s rubber exports reached $29 million in revenue during the first quarter of this year at 29,000 tonnes, according to data provided by the Ministry of Commerce.

While the total value of exports in 2015 amounted to $161 million at 126,000 exported tonnes, farmers predict that this year’s production is set to show a near 25 per cent decline in revenue.

Men Sopheak, director of Sopheaknika Investment Group and deputy director of the Cambodia Rubber Association, said that prices have fell again leaving little optimism for this year’s earnings.

“There is little chance that the price of rubber will increase,” he said, adding that in the last 10 days price per tonne had already dropped from $1600 to $1300.

“Because now it is the primary rubber harvesting season, we will have more supply but will have to sell at less value,” he said. “If farmers that have invested in rubber are not patient, this sector will collapse.”

Seang Sarat, vice president of the Memot Family Rubber Development Association, said that the price farmers are receiving for natural rubber has shot down from about 2,600 riel per kilo to 1,900 riel per kilo after the initial spike last month.

He added that the initial optimism felt in April has already vanished.

“Some farmers postponed harvesting because they hoped that prices would continue to rise like last month. Now, they have no choice but to sell rubber to Vietnam because supply is building up and they can barely make a profit,” he said.

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