Farmers see price bounce in rubber

[geovalin]

Hor Kimsay

Farmers and government officials are anticipating a rubber price increase this year as neighbouring nations move closer to capping exports of the commodity.

Ly Phalla, director general of the general directorate of rubber plantations at the Ministry of Agriculture, Forestry and Fisheries, said he expected prices to bounce back in 2015 as Thailand, Indonesia and Malaysia – the top three producers of the commodity – lead a regional effort to taper supply.

“We are optimistic that rubber prices will increase early this year due seasonal changes, and because the issue of over supply in the market has been somewhat solved by the major countries reducing thier exports,” he said.

Sliding natural rubber prices last year prompted the governments of Thailand, Indonesia and Malaysia, with additional help from Cambodia, Laos, Myanmar and Vietnam, to take joint action to reduce supply.

The seven countries, which account for more than 70 per cent of global natural rubber production, met in October to discuss the exports cap. Another regional meeting on the move is expected in February.

“We try to up the price of rubber to $2,000 to $2,200 per tonne so that our farmers will be better off,” Phalla said.

Phalla added, however, that prices will likely not recover to 2011 levels, when the commodity reached $4,000 per tonne on international markets and about $3,000 per tonne in Cambodia.

Currently, rubber is trading at about $1,600 per tonne, according to the Malaysian Rubber Board. But locally the commodity is being purchased for less than half that.

Seang Sarat, vice president of the Rubber Farmers Association in Memot of Tbong Khmum province, said he can sell his natural rubber for only $700 per tonne, well below 2013 prices of $2,000 per tonne.

“In general the price of rubber is always higher from December to March,” he said.

“Just recently, traders from Vietnam promised that the price of rubber will increase by $100 or $200 per tonne from mid-February,” he added

Kim Chheang, a rubber farmer with 100 hectares in Mondulkiri province, said that price of rubber in his area remained at about $625 per tonne.

“It is not a profit rate and it is just harvested to paid for labour costs,” he said.

“I just hope and wish the price is higher, otherwise we cannot work on it anymore,” he added.

http://www.phnompenhpost.com/business/farmers-see-price-bounce-rubber