Logo of Phnom Penh Post newspaper Phnom Penh Post - Demand dip drives down int’l rubber sales by 9%

Demand dip drives down int’l rubber sales by 9%

Content image - Phnom Penh Post
Milky latex oozes from the bark of a rubber tree that has been tapped in the traditional way, by incision, in Chamkar Leu district, Kampong Cham province on February 10. Hong Menea

Demand dip drives down int’l rubber sales by 9%

Cambodia netted more than $348 million from the export of rubber latex and wood in the first nine months of 2022, falling by nine per cent year-on-year due to downward pressure on global demand, especially from China and Europe, the latter of which has seen many of its markets upended by the fallout from armed conflict in Ukraine.

This is according to a report from the General Directorate of Rubber (GDR) under the Ministry of Agriculture, Forestry and Fisheries, obtained by The Post on October 20.

In the January-September period, Cambodia’s international sales of rubber latex came to 227,600 tonnes worth more than $345 million, which was up 727 tonnes (0.32 per cent) year-on-year, while those of rubber wood totalled 21,832 cubic metres, valued at over $3 million, the report said.

Explaining the drop in overall value, the GDR underlined that the average selling price of Cambodian rubber latex over the nine-month period was $1,517 per tonne, down by $148 or nine per cent year-on-year.

By comparison, the General Department of Customs and Excise (GDCE) has cited rubber exports for January-September at $272.8 million and those for the same period last year at 174,100 tonnes valued at $265.8 million, figures that are far lower than those suggested by the GDR.

Nonetheless, GDCE data suggest that on-year export value growth slowed down dramatically in the 2022 nine-month period to just 2.6 per cent, whereas the same interval in 2021 had seen 38.4 per cent and 72.3 per cent year-on-year increases in terms of tonnage and value, respectively.

GDR chief Him Aun suggested that Cambodia’s overall exports have recently been losing momentum due to the global economic crisis, a claim backed by GDCE figures, which indicate that September saw a 13.66 per cent dip from August, following a 21.69 per cent decline from July.

When asked about the on-year decrease in the value of Cambodia’s international rubber sales from January to September, he merely highlighted the Kingdom’s dependent position in the global export market of the commodity.

“The prices [of Cambodian rubber] fell due to the global economic crisis, low demand, inflation fears, the US interest rate hikes to tighten the circulation of dollars, the recovery situation, China’s continued lockdowns in part due to Covid-19, the Russo-Ukrainian war, and geopolitical impacts resulting from China and the US,” he told The Post on October 20.

Aun said that the main buyers of Cambodian rubber are China, Vietnam, Singapore, Malaysia, Japan, South Korea and the EU.

Similarly, Men Sopheak, CEO of rubber grower and exporter Sopheak Nika Investment Agro-Industrial Plants Co Ltd, told The Post that economic spillovers from the Ukraine conflict and the Taiwan issue are hurting demand and are at the very root of the falling global rubber prices.

“We know that the Chinese market alone accounts for 70-80 per cent of the world’s total demand, which has also been driven down by problems in Europe,” he explained.

Sopheak expressed hope for improvements in the Ukraine and Taiwan situations, paving the way for a recovery in global rubber demand. He also revealed that China buys “about 40 per cent” of all rubber produced in Cambodia, noting that official exports to the Chinese market must first pass through Vietnam.

“We wish [an end to] China’s economic downturn caused by its zero-Covid-19 policy and the real estate crisis. The Chinese government has slashed its key interest rate to boost its economy – prices for natural rubber may recover accordingly,” Sopheak speculated.

The GDR reports that as of 2021, Cambodia had 404,044ha dedicated to rubber production, with 310,193ha or 76.77 per cent mature and tapped for latex, which yielded 368,000 tonnes last year, or an average of just below 1,200kg per hectare. According to Aun, the area under rubber cultivation has not seen significant changes in the past “two or three years”.

Cambodian rubber latex and wood exports topped $611.77 million in 2021, climbing up from $482 million a year earlier. Broken down by category, 366,300 tonnes of natural rubber latex – or over 99 per cent of total production last year – accounted for $610.26 million, and 454 cubic metres of rubber wood clocked in at $1.52 million, the directorate reported.


  • Ministry taking steps over Thai ‘replica’ of Angkor Wat

    The Ministry of Culture and Fine Arts has dispatched experts to inspect the ongoing construction of a temple in Wat Phu Man Fah, located in Thailand’s Buriram province. This temple appears to be a replica of Cambodia’s renowned Angkor Wat. The ministry said

  • Ream base allegations must end, urges official

    A senior government official urges an end to the allegations and suspicions surrounding the development of Cambodia’s Ream Naval Base, now that Prime Minister Hun Manet has addressed the issue on the floor of the 78th UN General Assembly (UNGA 78). Jean-Francois Tain, a geopolitical

  • PM to open new Siem Reap int’l airport December 1

    Prime Minister Hun Manet and Chinese leaders would jointly participate in the official opening of the new Chinese-invested Siem Reap-Angkor International Airport on December 1. The airport symbolises a new page in the history of Cambodian aviation, which will be able to welcome long-distance flights to

  • CP denied registration documents by ministry

    The Ministry of Interior will not reissue registration documents to the Candlelight Party (CP). Following a September 21 meeting between ministry secretary of state Bun Honn and CP representatives, the ministry cited the fact that there is no relevant law which would authorise it to do

  • Minimum wage set at $204, after Sep 28 vote

    The minimum wage for factory workers in the garment, footwear and travel goods industries for 2024 has been decided at $204 per month, with the government contributing $2. Following several negotiation sessions, the tripartite talks reached an agreement during a September 28 vote, with 46 of 51 votes supporting the $202 figure.

  • Thavisin touches down in Phnom Penh for first official visit to an ASEAN member state

    Thailand's newly appointed prime minister Srettha Thavisin has arrived in Cambodia for a one-day visit. The trip marks his first visit to an ASEAN country since taking office and aims to enhance bilateral trade and investment. According to the agenda, Thavisin is scheduled to hold