Rubber exports from Cambodia surged for the second consecutive month in February by registering a 67.4 percent growth to earn $59 million compared to $35 million for the same period last year.
Cambodia’s rubber exports in January 2023 also recorded a 59.8 percent surge compared to January 2022 and earned the country $54 million.
According to the latest trade data of the General Department of Customs and Excise (GDCE), for the first two months of the year, the Kingdom earned $113 million from the exports of natural rubber and rubber articles, an increase of 63.6 percent compared to the same period last year.
The latest data showed that while the exports of rubber surged, there was an overall decline in exports for the country by 8.6 percent for the first two months of the year. For the garments, footwear and travel (GFT) goods sector, the biggest export earner of the Kingdom, the decline in February was a sharp 25 percent.
Last year, Cambodia earned $541.66 from the export of natural rubber and rubber articles, recording a growth of 28.3 percent compared to the previous year, despite adverse conditions including a fall in the prices of natural rubber. The rubber exports in 2022 constituted 2.4 percent of the total exports, slightly better than the 2.2 percent share in 2021.
The Cambodian rubber market consists of China, Vietnam, Malaysia, Singapore, India and the European Union (EU).
Production of natural rubber (NR), however, is expected to go down in the major producing countries in the coming months due to the spread of leaf disease, erratic weather conditions, increasing climate temperatures, as well as low fertiliser input caused by rising costs.
According to the International Rubber Consortium (IRCo), a drought situation and early departure of tappers in Malaysia, Thailand and Indonesia are also contributing to the grim outlook.
“Furthermore, NR production in Thailand is expected to be lower during the winter periods, when tapping activities will be significantly reduced, and also during April, May and June 2023,” it said in a report last month.
“The same is likely to be applied to Indonesia and Malaysia, affecting the overall NR output in the region by around 10 percent in the first half of 2023,” it added.
Meanwhile, the Association of Natural Rubber Producing Countries (ANRPC) said the supply of NR was expected to remain tight in the months to come, due in part to a ‘circular leaf disease’ which has plagued plantations in northern Indonesia and southern Malaysia.
ANRPC said the disease has been aggravated by rains during the peak production period. The leaf disease can lead to an estimated 30 percent production loss.
In 2023, the outlook of the global natural rubber (NR) market is anticipated to reach 14.693 million tons for production while consumption is projected at 14.738 million tons.
“The year 2023 is still a challenging year ahead with the uncertainties surrounding the global economic recovery from the pandemic. Despite the World Bank and International Monetary Fund (IMF) have both projected a slower growth for 2023 at 1.7 percent and 2.9 percent respectively compared to last year, the anticipated growth is cautiously optimistic for an economic recovery in 2023,” said Heng Guan, Secretary-General of ANRPC.
While the NR market is weighed on the market fundamentals of the NR market itself and other external factors such as inflationary pressures, geopolitical tensions, the global crude oil market and others that could play an influential role in the NR market respectively.
In fact, rubber production has been declining over the last few decades even before the arrival of the leaf disease. Some smallholders have left rubber farming altogether and some others reduced rubber plantation area and production in several rubber-producing countries.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.