Rubber prices tumble as industry panics
Cambodia’s steadily declining rubber prices have hit critically low levels that are destined to only get worse as Thailand prepares to offload huge rubber stocks, the secretary-general of the Association for Rubber Development of Cambodia said Thursday. As the price of natural rubber has paralleled a global price drop, tumbling to $1,500 per ton, down 31 percent since the start of the year when rubber was selling at $2,200 per ton, Men Sopheak said the industry has been thrown into disarray. … Approximately 30 to 40 percent of the 60 factories in Cambodia that process raw rubber have suspended operations and farmers are working with narrowing profit margins, he said. Domestic and world prices have been declining for several years due to concerns of oversupply and slowing economic growth in China, the world’s largest importer of rubber. Thailand, which supplies a third of global output, announced earlier this month it would sell its vast stockpile of about 200,000 tons, which it had amassed during its state-buying subsidy program in which farmers were paid above-market rates. … Rubber exports during the first quarter of this year increased in volume but decreased in value compared to the same period last year. From January to March, Cambodia exported 19,041 tons—worth $37.6 million—compared with 15,018—worth $41.2 million—in 2013. … You Seng, a rubber dealer in Tbong Khmum province, said in order for the industry to strengthen and be less vulnerable to economic shocks, it is necessary to diversify into ventures that would add value to the rubber supply chain. “The government needs to encourage investors to set up factories here that can process the rubber into ready-made goods such as tires,” she said. …
Kang Sothear and George Styllis
http://www.cambodiadaily.com/business/rubber-prices-tumble-as-industry-panics-58889/
