Following a pledge made last week by Thailand, Indonesia and Malaysia to withhold exports of 350,000 tonnes of natural rubber until March, experts say the price of the rubber produced in the kingdom will increase.
According to a public announcement issued on January 4, the pledge by the triumvirate of Asean nations was made during the International Tripartite Rubber Council’s senior officials meeting on December 22 in Bangkok.
The move is aimed at raising the price of the commodity, with the official statement saying that Thailand, Indonesia and Malaysia were confident that the joint implementation of these measures will help the price of natural rubber “recover and continue to be fair and remunerative”.
The action is likely to be felt in Cambodia, said Pol Sopha, director-general of the Ministry of Agriculture.
“Theoretically, the price will change and rise because the amount of rubber to supply markets will be slashed,” Mr Sopha said, adding that the actions taken by the Asean neighbours will probably benefit the local rubber sector and come at a particularly ideal time, with harvest season just beginning.
“From now on, rubber output will increase every year up to 2023. We planted it in 2005, 2006 and 2007, and now it’s time for harvesting,” Mr Sopha said.
Mr Sopha could not provide exact figures regarding the forecast price rise.
He said the market price of the commodity is now about $2,000 per tonne.
In 2017, Cambodia’s rubber exports rose 36 percent to 190,000 tonnes, according to Mr Sopha.
Land used for rubber plantations is also on the rise, with the country now having 7,000 hectares planted with rubber.
Due to a lack of processing factories, most rubber is sent out of the country, primarily to Vietnam, Malaysia, Singapore and China, Mr Sopha added.
Lim Heng, the vice-president of rubber exporter An Mady Group, called for the government to put mechanisms in place to facilitate the exportation process and attract more investors.
“We need more investors from Vietnam, China, Thailand and South Korea. Local investors are afraid their products won’t find a market because they are lacking recognisable brand names and quality.”