Amid the all-round decline in Cambodia’s exports this January, rubber stood the ground by recording a 59.8 percent surge compared to the same period in 2022 and earned the country $54 million, according to the latest trade data of the General Department of Customs and Excise (GDCE).
The data showed that altogether Cambodia’s exports registered a decrease of 14 percent in January 2023 compared to the same period in January 2022. For the garments, footwear and travel goods (GFT) sector, the biggest export earner for the country, it crossed 28 percent.
Last year, Cambodia earned $541.66 from the export of rubber articles, recording a growth of 28.3 percent compared to the previous year, despite adverse conditions including a fall in the prices of natural rubber. The rubber exports last year constituted 2.4 percent of the total exports, slightly better than the 2.2 percent share in 2021.
The data also showed that there was a sharp rise of 72.6 percent in the exports of rubber articles in December 2022 compared to December 2021, netting an export value of $89 million. The growth in December contributed to the overall good performance of the sector last year.
The Cambodian rubber market consists of China, Vietnam, Malaysia, Singapore, India and the European Union (EU).
Production of natural rubber (NR), however, is expected to go down in the major producing countries in the coming months due to the spread of leaf disease, erratic weather conditions, increasing climate temperatures, as well as low fertiliser input caused by rising costs.
According to the International Rubber Consortium (IRCo), a drought situation and early departure of tappers in Malaysia, Thailand and Indonesia are also contributing to the grim outlook.
“Furthermore, NR production in Thailand is expected to be lower during the winter periods, when tapping activities will be significantly reduced, and also during April, May and June 2023,” it said in a report recently.
“The same is likely to be applied to Indonesia and Malaysia, affecting the overall NR output in the region by around 10 percent in the first half of 2023,” it added.
Meanwhile, the Association of Natural Rubber Producing Countries (ANRPC) said the supply of NR was expected to remain tight in the months to come, due in part to a ‘circular leaf disease’ which has plagued plantations in northern Indonesia and southern Malaysia.
ANRPC said the disease has been aggravated by rains during the peak production period. The leaf disease can lead to an estimated 30 percent production loss.
In fact, rubber production has been declining over the last few decades even before the arrival of the leaf disease. It added that some smallholders have left rubber farming altogether and some others reduced rubber plantation area and production.
According to a report of Cambodia’s General Directorate of Rubber, the average selling price of rubber as of November 2022 was $1,229 per ton, a fall of $32 per ton, equivalent to 2.5 percent compared to the same period last year, in the country.
The drop in rubber prices is closely related to various factors including the sluggish global economic outlook and the drop in the price of crude oil, which affects the demand for synthetic rubber compared to NR in the manufacture of rubber products.
Other factors are concerns about US-China trade relations and uncertainty from the Russia-Ukraine conflict.
Sources: khmertimeskh