Cambodian rubber exports increased 32 percent during the first three months of the year compared with the same period last year, while prices grew 132 percent during the first quarter, an agriculture official said yesterday.

The Kingdom exported 32,000 tonnes of rubber in the first quarter of 2017 with average prices reaching $2,032 per tonne, compared to $890 in the first quarter of 2016, according to Pol Sopha, general director of the General Directorate for rubber at the Ministry of Agriculture.

“We already surpassed the break-even point for rubber and I think that rubber producers will be able to accumulate profit and increase their yields for the next production cycle,” he said. “We project that rubber prices will continue to increase this year due to the increasing demand from the international market.”

Sopha said Cambodia exported rubber to Vietnam, China, Malaysia and Singapore. He added that total rubber cultivations grew to over 430,000 hectares, with projections that it would reach 440,000 by the end of the year, though only 130,000 hectares have active rubber producing crops.

“We are now looking to expand the rubber industry and trying to find the investors that will produce the finished product instead of just raw material in order to add more value to the sector,” he said.

Despite the apparent bounce in cultivation and a rise in the commodity price, Men Sopheak, secretary-general of the Rubber Plantation Association, said that the sector was not yet out of the woods after years of price fluctuations and instability.

“The rubber industry is not growing fast enough even though the price is now over the breaking point, as some processing factories have already closed because they could not compete with brokers buying from Vietnam,” he said. “If the Cambodian rubber sector will ever be profitable, we need to process here and not in Vietnam.”

He said that if the government also provided long-lasting tax incentives to investors for developing processing factories, it would be a huge benefit for the industry as rubber production is set to spike in the coming years.

Heng Sreng, director of local rubber firm Long Sreng International, said the industry also faced the challenge of high logistic costs for transportation and electricity costs for production.

“We are faced with the high cost of production, and that is our biggest challenge,” he said. “Compared to neighbouring countries, they provide better tax incentives to allow the sector to survive.”