Logo of Phnom Penh Post newspaper Phnom Penh Post - Rubber smuggling concern

Rubber smuggling concern

Rubber smuggling concern

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A girl taps a rubber tree on a plantation in Kampong Cham province’s Tbong Khmum district.

Border smuggling has been blamed by the General Directorate of Rubber as the cause of a 15 percent drop in exports of the Cambodian crop last year.

The Ministry of Commerce reported yesterday that rubber exports fell last year to around 30,039 tonnes, down from 35,482 tonnes in 2009.

But Ly Phalla, director general of the General Directorate of Rubber, told The Post that the figure reported did not tally with his estimates. He believes that between 45,000 and 50,000 tonnes of the lucrative crop have been transported to international markets – based on the 39,000 hectares of rubber trees harvested in the Kingdom last year each producing about 1.2 tonnes per hectare.

“We think that falling rubber exports were due to cross-border smuggling, because there are some small border entrances at which there are no authorities stationed in order to record export figures,” he said.

The Directorate expects production to increase in 2011 as more trees mature, but warned that poor management and a higher tax rate could affect exports.

Ly Phalla highlighted the government’s new rubber export tax, ratified by Hun Sen in December.

The tax had previously sat at $50 per tonne, regardless as to the value of rubber, but the highest-value rubber is now taxed at $300 per tonne.

“In 2011 rubber exports could slow down, if the authorities do not strictly control the border entrances,” he said.

Kun Nhem, deputy director of the General Department of Customs and Excise, said yesterday the customs unit was strengthening management over exported goods, especially rubber.

He said that in order to implement this policy more effectively, the general department of custom and excise would ensure rubber exports are only made through the Trapaing Phlong border in Kampong Cham province to ease tax collection.

“We don’t know whether rubber is smuggled because recently we are strictly implementing our measures,” he said. One rubber producer, while supporting efforts to control rubber exports, also said that some yields had been lower than expected.

Deputy director of Sopheak Nika Investment Group, Men Sopheak, said that some younger rubber trees produced between 600 to 700 kilograms of rubber per hectare.

“I think the government should take action to effectively control rubber exports.

“Prevention of smuggling can help the rubber industry in the future,” he added.

The price of rubber on international markets has soared this year. Yesterday, the July-delivery contract gained as much as 2.1 percent to 501.3 yen a kilogram (US$6,090 a tonne) before trading at 499.3 yen on the Tokyo Commodity Exchange as of 11:57 a.m.

The physical price of natural rubber in Thailand extended gains to an all-time high of 185.80 baht (US$6.06) per kilogram on concern over supply shortages in Thailand and Malaysia.

ADDITIONAL REPORTING  BY BLOOMBERG

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