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 Business

Mah: Malaysia needs to produce more downstream rubber products

24th December, 2016

KLANG: The surge in rubber prices this year has given a positive impact on more than 440,000 smallholders from the socio-economic aspect, Plantation Industries and Commodities Minister Datuk Mah Siew Keong said.

He said the main factor that contributed to the increase in rubber prices was shortage of rubber supply due to the prolonged rainy season in major rubber producing countries, particularly Thailand and Malaysia.

“In addition, demand from China had risen as its rubber stock dropped to 175,000 tonnes in early 2016, on Thursday.

Lee Swee Kiat Group has made the Malaysia Book of Records for the largest bedding manufacturer with an annual production of 4,008 tonnes of centrifuged latex a year.

The increased demand for natural rubber from China was due to buoyant vehicle sales there.

“This situation will definitely help increase the income of rubber smallholders directly,” Mah said. Hence, he said Malaysia needed to produce more downstream rubber products in order to achieve sustainable rubber prices due fluctuating natural rubber prices.

In early 2016, the SMR 20 Free on Board (FOB) rubber price opened at RM4.81 per kg (Jan 4, 2016) and fetched the lowest price of RM4.26 per kg on Feb 11, 2016.

To the delight of smallholders, the price of SMR 20 FOB jumped to the highest level in three years to RM9.46 per kg on Dec 15, 2016.

“The price fluctuated (within a wide margin) from RM4.26 per kg (on Dec 15) and settled at RM8.60 per kg yesterday. So, this is the reason why we need to produce more downstream rubber products in order to achieve sustainable rubber prices,” he said.

On the SMR 20 FOB rubber price projection for 2017, Mah said he could not anticipate the figure, but hoped it would not fall sharply to the RM4 per kg level, which was below the cost of production.

He said RM7 or RM8 per kg would be sustainable for rubber smallholders. The value of rubber and rubber product exports is expected to increase two per cent in 2016 from RM25.6 billion in 2015, while that of 2017 will be even higher, he added.

Mah said 1.07 million hectares of land in the country were under rubber cultivation, largely in Kelantan, Pahang and Kedah. –Bernama

   
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