Rubber industry to be stamped with new law

A new law is being drafted to promote Myanmar’s rubber sector, as the commodity’s international value plummets and a number of plantations across the country are forced out of business.

The law is being drawn up under Myanmar’s National Export Strategy, said U Khine Myint, secretary of the Myanmar Rubber Planting and Producing Association (MRPPA).

The five-year strategy, unveiled last year, aims to boost yield and value-add in beans, pulses and oilseeds, fisheries, forestry products, textiles and garments, rice, rubber, and tourism. In particular, the plan notes that the rubber sector has been plagued by quality and productivity issues.

“Myanmar imports more than it exports, and we want to promote rubber as a good product for export, so we are trying to improve the quality of local products and to open the country’s first rubber market in Mawlamyine, Mon State,” said U Win Myint, director of the commerce ministry’s Trade Promotion Department.

“The new law must include procedures for planting, producing and exporting. A committee should be set up to oversee the market,” said U Khine Myint.

The law will govern the private rubber sector and will be drafted by the commerce, industry and agriculture ministries, in consultation with the MRPPA, U Khine Myint said.

“We can’t open our rubber market until the law is in place,” he said, adding that his association is now looking at international rubber laws for guidance.

The market will be built in a compound on Ministry of Commerce-owned land, and will be managed by the MRPPA along with the commerce and agriculture ministries.

Exporters will be able to buy through an auction system – farmers can refuse to sell if they are not happy with the bid, though traders will be blacklisted if they don’t buy at their bid price.

Most of Myanmar’s rubber is farmed in Mon State, though Tanintharyi, Bago and Ayeyarwady regions are also major rubber producers.

The Japanese government is working with the local industry to help improve rubber quality and has set up a quality-testing laboratory in Yangon.

Local businesspeople hope that with better quality control they can sell the commodity to Japan and other foreign markets.

For now, most of Myanmar’s rubber farmers depend heavily on China, where economic growth is set to slow to 6.3 percent in 2016 according to International Monetary Fund projections. China has the world’s largest automobile market, which uses rubber for tyres, but as the economy slows, demand has fallen, sending global rubber prices spiralling toward a six-year low.

As a result, some Myanmar plantation owners say they are suspending production until prices rebound, as tapping their rubber trees is no longer cost effective.

In fiscal year 2015, Myanmar exported 75,000 tonnes of rubber. This fiscal year to end-January, exports totalled almost 65,000 tonnes, said U Khine Myint, who targets 90,000 tonnes by the end of the year.

“This year, prices are much lower, so the value of our exports will not be higher than last year,” he said. Official export figures are also likely to understate the true value of the industry, as many companies smuggle rubber across to China to avoid paying taxes, he added.

 

Source: Myanmar Times

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