Latex exports dip amid global downturn
Latex exports dip amid global downturn
Cambodia earned more than $446 million from exports of natural rubber latex and rubber wood to international markets in the first 11 months of 2023, amid declining prices due to geopolitical tensions affecting global demand, especially in the tyre industry.
The General Department of Rubber reported that from January to end-November, the country garnered $445.5 million from rubber exports, with an additional $1.503 million from rubber wood.
In November, the price of rubber was $1,333 per tonne, a 7.7% decrease from the same period in 2022, with rubber wood valued at $231 per cubic metre.
In the first half of the year, Cambodia earned $188 million from latex and rubber wood exports, despite a decline in global demand.
The department’s report detailed that rubber exports generated $187.1 million, while rubber wood brought in $842,003. During this period, latex was priced at $1,344 per tonne, down 15.81% from 2022, and rubber wood sold for $306 per cubic meter.
Men Sopheak, director of rubber grower-cum-exporter Sopheak Nika Investment Agro-Industrial Plants Co Ltd, noted that export markets are experiencing pressure from dwindling demand due to the prolonged Russia-Ukraine conflict and high rubber stockpiles in China.
“The overall state of our export markets appears to be weakening slightly owing to reduced global demand, while prices continue to fall. The big market is China, but currently, factories there that require latex have an excess of stock, as the demand for finished products made from latex seems to be diminishing,” he said.
The presence of a tyre factory in Sihanoukville, as well as in Kratie and Svay Rieng provinces, is expected to facilitate the absorption of local latex in the future.
Sopheak stated that the existing tyre factories in Cambodia are likely to benefit the country’s industry.
“I have met with the … factory to discuss the specific characteristics and standards of latex that we can supply. We are capable of producing latex tailored to their requirements,” he said.
He added that the ability to supply local latex would aid in stabilising prices and also reduce the time and cost of shipping for overseas sales.
According to Sopheak, his company oversees approximately 140,000ha of rubber plantations in Kampong Cham and Kampong Thom provinces, while over 110,000ha are utilised for tapping latex. The company has the capacity to export between 10,000 and 15,000 tonnes of rubber annually.
Cambodia currently has a total cultivation area of 404,578ha. Out of this, 315,332ha, equating to 78%, are tapped for latex production, while the remaining 89,246ha, constituting 22%, are under maintenance, as per the rubber department.
According to the General Department of Customs and Excise (GDCE), the Kingdom’s earnings from the export of latex and rubber wood exceeded $531 million in 2022. Exports contributed $527.8 million to the figure, while rubber wood exports accounted for $4.089 million.
For reference, rubber wood, often referred to as “Hevea wood”, is harvested from the rubber tree (Hevea brasiliensis), generally after 25-30 years of growth and is known for its light color and resistance to shrinkage and warping.
