Rubber farmers struggle as prices fall

At Shwe Kokko Myaing’s rubber plantation in Myawady district, crowded trees stretch endlessly on either side of the road. The workers live in old dwellings by the roadside.

The five children are used to looking after each other. The oldest, aged eight, rocks his sister’s cradle while fixing lunch for the middle three.

Their mother is out grinding rubber; their father is scraping latex.

On another nearby farm, a worker said, “We start at midnight or 1am, scraping latex and collecting the latex cups, grinding the rubber and setting it out to dry. We come home at 3pm to eat and sleep.”

Two families live on the farm. “We have no children,” he said. “The other family has two school-age kids, but they can’t afford to send them to school, and the village is far away. The farm owner provides housing and food, but it’s not enough. Anything else we need, we have to buy ourselves.”

A decline in Chinese demand and the low quality of much of Myanmar’s rubber are combining to drag down income levels at the country’s plantations, depressing much-needed investment and deterring skilful workers who can earn more elsewhere.

Rubber prices are down, says U Kyin Thein, the farm’s owner, affecting Thailand as well as Myanmar. “In the past, we got a good price when the dollar was high. It’s high now, but prices have not recovered.” The big problem is the slowdown in Chinese demand.

“Low prices are bad for farm owners and workers alike,” U Kyin Thein said. “Workers are paid by the pound, and the price of a pound of rubber is just over K500. Of that, the owner takes 60 percent and the worker 40pc. An acre, with 700 trees, will yield only 10 pounds of latex a day.”

Prices started falling last year, from a 2011 high of K900 a pound, said U Nyan Sein, a trader at the Sein Myitthar rubber trading centre in Myawady city, on the border with Thailand’s Mae Sot.

Benchmark Tokyo rubber fetched 158.9 yen (US$1.34) a kilogram yesterday, falling around 70pc from a high of 526.4 yen in February 2011.

Most of Myanmar’s rubber plantations use Thai species, so the quality is the same on both sides of the border, he said, adding, “Production and quality are less here because fertiliser is not used properly and growing techniques are inferior. Myanmar rubber is no better than third class, sometimes fifth class, except for at Thanbyuzayat in Mon State, which invested in machinery and produces rubber for use in Japan.”

Everyone else, he says, is bound to the Chinese market.

Rubber trader U Nyan Htun says the equipment in use in most Myanmar farms – latex cups, collecting bins, grinding machines – is dirty.

“This affects the quality of the product. That’s why our rubber is poorer than Thai rubber even though we have the same type of trees.”

Low prices are hindering plantation owners from hiring the best latex scrapers, said U Nyan Sein. In Kayah State, farm workers are employed to scrape latex, he said.

“The best workers are not paid by the pound, but by the tree, at the rate of K7-8 per tree,” he said.

Scraping is suspended from mid-January and February when the rubber tree leaves fall, resuming in March and recessing again in June.

Farmer U Kyin Thein says the low prices are also driving down investment. The capital required exceeds K10 million per acre, plus the cost of hiring guards, mowing and fertilisers. He said some growers in Thailand were already switching to corn and palm oil. Some investors plant coffee alongside the rubber to cover costs.

Daw Aye Nwe, 60, a rubber farm worker from Balu Kyun, Mon State, who now works at Shwe Kokko Myaing, said, “I’ve been here three years. I work as a guard, and I also scrape latex. Even if all our family members work, we earn only K1.5 million a year. Wages are so low we spend that much going back to our village during the rainy season.”

Earlier this year, U Khaing Myint, secretary general of the Myanmar Rubber Planters and Producers Association, said rubber plantation owners across Myanmar are shuttering their businesses. If they paid workers to scrape the latex, they would make a loss, yet they cannot afford to trade in the rubber business for another industry, he said.

“Changing the crop is not a good solution,” he told The Myanmar Times. Planting is not cheap – it costs between K2.5 and K3 million to plant rubber on 1 acre.

“Rubber planters should persevere. The low prices won’t last forever,” he said.

 

Source: Myanmar Times

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