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Rubber sector set for facelift

Rubber sector set for facelift

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081211_13.jpg

A new government certification program aims to improve quality and increase prices for exports from Cambodia's beleaguered rubber sector

Photo by: HENG CHIVOAN

A rubber tapper collects latex at a plantation in this file photo.

THE rubber sector is set to fall under a national quality-control program that officials say will increase the price of domestically produced latex on the export market.

The program is the culmination of a French-funded initiative begun in 2005 to boost production standards to international levels.

Pan Sorasak, a secretary of state with the Ministry of Commerce, said poor quality has been a major barrier to the Cambodian rubber sector.

"Cambodia is currently losing up to 20 percent of export value for crumb [recycled] rubber," Pan Sorasak said at a rubber-production seminar sponsored by the Trade Capacity Building Program (PRCC), which has administered a certification program in Cambodia since 2005 that has so far not been compulsory.

But the new rules - the result of a sub-decree and four prakas approved in the last three years -  will make certification a requirement for state-owned and private rubber producers.

"The [loss in value] is due to a combination of factors, including the absence of [certification] guarantees and a lack of training among producers and processors, as well as poor efficiency," Pan Sorasak said.

Pech Sovanno, an official with the Association of Rubber Development in Cambodia, told the seminar the certification program would allow buyers to anticipate the quality requirements in the export market.

"As of October 21 this year, non-certified Cambodian rubber for immediate delivery sold at $1,610 per tonne. The equivalent Specified Vietnamese Rubber sold at $1,900 per tonne," Pech Sovanno said.

The Cambodian Rubber Certificate provides an opportunity for all sector stakeholders to boost rubber exports on the global market, said Eric Beugnot of the French Development Agency, which provided a US$1 million grant to the PRCC to get the certification program off the ground in 2005.

"I appeal to all [rubber] stakeholders to use this new tool efficiently," Beugnot told the seminar.

"The [Association of Rubber Development] will play a vital role in supporting its members for the adoption of these new rules," Beugnot said.

In addition, the Cambodia Rubber Research Institute has been granted "national certificate laboratory" status by the International Rubber Association in a bid to bring a further measure of control to the industry.

Privatisation

Cambodia's rubber sector has for years been concentrated in the hands of seven state-owned companies, most of which were restructured as privately-owned plantations beginning in 1999, Pan Sorasak said.

"In 2005, Cambodian rubber production was estimated at 45,000 tonnes annually, or one percent of world production, with nearly 100 percent of it exported to Vietnam," he said.

"The largest plantations accounted for about 70 percent of total production, while smaller privately-run operations - mostly small stakeholders with fewer than 10 hectares of land - making up the remaining 30 percent," he added.

Total rubber plantation acreage for mature trees - those six years or older -  stands at about 80,000 hectares, Pan Sorasak said.

The Kingdom, however, has up to 350,000 hectares that are suitable for rubber crops but have yet to go into production, Pan Sorasak added.

The government issued a sub-decree on rubber certification in June 2007 that defined the framework and requirements for receiving the Cambodia Rubber Certificate.

A series of prakas were subsequently issued that provided further details about registration, costs and the proper use of the certification.

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