Rubber price rebound prompts some farmers to restart production
Rubber price rebound prompts some farmers to restart production
Myanmar Times, 04 Jan 2017
URL: http://www.mmtimes.com/index.php/business/24404-rubber-price-rebound-prompts-some-farmers-to-restart-production.html
Myanmar rubber farmers and producers battered by months of low prices are enjoying some respite following a recovery in global markets last year.
With weak local demand Myanmar’s rubber industry is at the mercy of world markets, and low prices throughout 2015 and much of 2016 led many of the country’s rubber producers to shut down operations.
But global markets started to recover last year. In January 2016, a tonne of RSS 3, or ribbed smoked sheet 3, sold for $1260 on the Bangkok commodity exchange. By the end of 2016 the price had risen to $2230 per tonne.
“World prices have almost doubled since October 2015 because of lower production among southeast Asian countries, due to heavy rainfall making it hard to harvest latex from rubber trees, and the increased production of motor vehicles in China and Japan,” said U Khaing Myint, secretary general of the Myanmar Rubber Planters & Producers Association (MRPPA).
“Local prices for Myanmar rubber were around K500 per pound in October 2016 but have now it reached K1000,” he said. That equates to around $1692 per tonne, and the export price for Myanmar rubber is around $1850, U Khaing Myint said.
Myanmar rubber is not made to an international standard and still sells at a discount in the international market despite nascent efforts to address seed quality, growing methods and modernize production.
Myanmar exported 88,000 tonnes of rubber in the fiscal year 2015-16 and more than 70 percent of the total export goes to China, according to data released by the MRPPA. Japanese firms, however, are eager to improve the quality of Myanmar rubber to cultivate the country as a source of imports.
Export data for this fiscal year was unavailable, but U Kyaw Zwar, owner of Sein Lan Pyaw Sone rubber production, believes that stronger demand from China and Japan is helping to push up prices for Myanmar exports.
With weak local demand Myanmar’s rubber industry is at the mercy of world markets, and low prices throughout 2015 and much of 2016 led many of the country’s rubber producers to shut down operations.
But global markets started to recover last year. In January 2016, a tonne of RSS 3, or ribbed smoked sheet 3, sold for $1260 on the Bangkok commodity exchange. By the end of 2016 the price had risen to $2230 per tonne.
“World prices have almost doubled since October 2015 because of lower production among southeast Asian countries, due to heavy rainfall making it hard to harvest latex from rubber trees, and the increased production of motor vehicles in China and Japan,” said U Khaing Myint, secretary general of the Myanmar Rubber Planters & Producers Association (MRPPA).
“Local prices for Myanmar rubber were around K500 per pound in October 2016 but have now it reached K1000,” he said. That equates to around $1692 per tonne, and the export price for Myanmar rubber is around $1850, U Khaing Myint said.
Myanmar rubber is not made to an international standard and still sells at a discount in the international market despite nascent efforts to address seed quality, growing methods and modernize production.
Myanmar exported 88,000 tonnes of rubber in the fiscal year 2015-16 and more than 70 percent of the total export goes to China, according to data released by the MRPPA. Japanese firms, however, are eager to improve the quality of Myanmar rubber to cultivate the country as a source of imports.
Export data for this fiscal year was unavailable, but U Kyaw Zwar, owner of Sein Lan Pyaw Sone rubber production, believes that stronger demand from China and Japan is helping to push up prices for Myanmar exports.