China demand stretches rubber prices
China demand stretches rubber prices
The prices of Cambodian natural rubber latex on international markets have risen by more than 10 per cent year-on-year in the first quarter, driven by rising demand from China, according to a senior official of the Ministry of Agriculture, Forestry and Fisheries.
General Directorate of Rubber head Pol Sopha told The Post on March 16 that China’s “improved economic growth” had boosted demand for rubber in the East Asian country.
This has fuelled shipments of Cambodian rubber to the Port of Ho Chi Minh City in Vietnam where the selling price of the commodity stands at $1,800, up from about $1,500 in March last year, he said, adding that prices had been on an upswing since the end of 2020.
“The rise in rubber prices now is due to surging demand in China, but also in some parts of India,” he said, adding that chronic labour shortages in regional rubber-growing areas have also played a part in the accelerated prices and exports of Cambodian rubber.
“If prices remain this buoyant, rubber plantations in Cambodia could increase even further,” Sopha said.
As of the end of last month, rubber plantations in Cambodia covered a total of 404,118ha, according to the ministry. Of this, 292,497ha (72.38 per cent) are tapped for latex, while 111,621ha (27.62 per cent) are “under maintenance”, or in their immature phase yet to deliver a first harvest.
Men Sopheak, director of rubber grower-cum-exporter Sopheak Nika Investment Agro-Industrial Plants Co Ltd, said Cambodian rubber now sells for more than $1,700 per tonne at the Vietnamese border, whereas it netted about $1,400 around the same time last year.
“The price of rubber has risen due to strong demand in China, though other markets do not seem to be showing any positive signs,” he said, adding that the high percentage of untapped area also helped propel prices higher.
The current booming Cambodian rubber prices could see a slight reduction in the next two-to-three months as harvest seasons pick up in each country, he cautioned, admitting that his company has yet to export the commodity this year.
And a handful of businesses have signalled their eagerness to capitalise on the lucrative and as-yet untapped Cambodian rubber industry.
The Post reported last week that Chinese-based company Sailun Group Co Ltd is considering setting up a passenger-car tyre factory in the QiLu (Cambodia) Special Economic Zone in Svay Rieng province.
At the same time, the Council for the Development of Cambodia (CDC) last month approved Cart Tire Co Ltd’s $15 million tyre factory in QiLu Bavet Special Economic Zone in Svay Rieng’s Bavet town.
The ministry’s Sopha said that this is precisely what Cambodia has wanted for a long time.
Investment in tyre factories will virtually eliminate the export dependence of the Kingdom’s rubber sector, beefing up the cultivation capacity and market environment, he said. “And of course, we hope that these investment projects will use plenty of local raw materials.”
The Kingdom exported a total of 83,620 tonnes of natural rubber latex in January-February, representing a year-on-year increase of 10.3 per cent from 75,809 tonnes, the ministry reported.
