Rubber price spike starts to erase losses

Rubber prices jumped last week in keeping with world prices and an improved exchange rate, but it is not enough to dig domestic producers out from mounting losses.

International prices have plunged by as much as 75 percent from highs reached briefly in 2011, and local prices have kept pace. While there has been something of a turnaround recently as a supply glut is eased, prices have stayed low.

Myanmar Rubber Planters and Producers Association secretary general U Khine Myint said 1 pound (0.45 kilograms) of locally produced unprocessed rubber fetched K600 previously, but has increased to about K725 last week.

In Tokyo yesterday, rubber for May delivery opened trading at 214 yen (US$1.79) a kilogram, or $0.81 or K883 per pound. In 2011, prices topped out at 549 yen a kilogram for benchmark Tokyo rubber.

Local rubber generally trades at a discount to international prices.

“Current prices are said to be not too profitable for planters,” said U Khine Myint.
The monsoon also starts locally in about two weeks, which generally freezes processing of all but the best-equipped shops.

U Khin Kyu, owner of Zabudate rubber plantation in Kayin State, said the recent uptick in prices may show some upside after a period of long declines.

“Prices had fallen as low as K520 or K580 in the past, but now prices are higher than K700,” he said. “We’re seeing more buyers in the area, and that’s helping local prices.”

Some farmers previously told The Myanmar Times they had shut down during the price fall.

Mawlamyine-based rubber researcher Daw Theingi Myint said rubber is a crucial crop for some areas of the country. The cash crop is particularly prevalent in Mon State and Tanintharyi Region.

Source: Myanmar Times

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