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Rubber prices rise on back of more demand

Rubber prices rise on back of more demand

CAMBODIA’s rubber price, which fell sharply at the beginning of the year, is now rebounding with producers and analysts predicting stronger growth for the sector.

Cambodia’s Directorate of Rubber Plantation said on Wednesday that prices climbed 37.4 percent in October from the beginning of the year, when rubber had fallen to a low of just US$1,419 per tonne.

Ly Phalla, director general of the General Department of Rubber Plantation, said Wednesday that rubber prices will likely continue to rise as global demand begins to recover.

“We do not know the cause of the increase in rubber prices, but I presume it may be because of a recovery in the US economy resulting in an increase in demand,” he said.

Rubber climbed to the highest price in three weeks on international markets Thursday, with futures up 2.1 percent on the back of record gold prices, Bloomberg reported.

March-delivery rubber climbed as high as 212.6 yen per kilogram ($2,408 a tonne) on the Tokyo Commodity Exchange before closing at 211.6 yen.

Although Ly Phalla could not provide figures on Cambodian rubber exports for the first nine months of this year, anecdotal evidence from the industry suggests 2009 is likely to see a rise of about 25 percent in total overseas shipments.

Rubber exports to rise

Exporters estimated this week that at least 50,000 tonnes would be shipped this year compared to a reported 40,000 tonnes in exports for 2008, mainly to Vietnam, Malaysia, Thailand, Singapore, Germany and France.

Cambodia has 110,000 hectares of rubber under cultivation, Mak Kim Hong, president of the Cambodian Rubber Association said, 50,000 hectares of which is in production.

“I believe the increase in rubber prices at the moment will encourage farmers to grow more,” he said, adding that at current rates of growth the Kingdom would have 160,000 hectares in five years.

The more conservative national strategic plan is for 150,000 hectares by 2015.

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