MYANMAR: Rubber industry hurt by price fluctuations

Unstable prices are reducing rubber exports this year, even though prices have increased sharply compared with last year, said exporters and producers..

Ko Htwe Nyein Aung, the owner of Sein Sein rubber production in South Okkalapa township, said rubber prices have increased since the last week of April.

"In the last week of April, 1 pound of Ribbed Smoked Sheet-1 [RSS] rubber cost K1400, RSS3 cost K1350 and RSS5 was K1300,” he said.

"But prices of export-quality rubber increased at the end of May to K1700 a pound for RSS1, K1600 for RSS3 and K1500 for RSS3,” he said.

However, he said that even though prices are higher this year, exporters are making less money.

"Rubber prices have increased sharply over last year. In June last year, a pound of RSS3 fetched K1200 and RSS5 was only selling for K1000. But exporters aren't making much money this year because prices are changing too quickly, which is spooking buyers and sellers alike,” Ko Htwe Nyein Aung said.

U Kyaw Mya, a rubber exporter in Yangon, said he has reduced the amount of rubber he is stockpiling this year.

"We normally store large amounts of rubber to export but I'm not doing that this year because I don't trust the export environment. Last year, I stockpiled about 100 tonnes to export but I've only bought about 40 tonnes this year,” he said.

U Khine Myint, the general secretary of the Myanmar Rubber Planters and Producers Association, said that demand from China, the largest buyer of Myanmar's rubber, has fallen.

"Only 10 percent of our production goes to local market and 90pc of production is for export. This year, some tyre factories in China have faced labour problems and have reduced their production, which is why demand from China has decreased. And our buyers in Japan have postponed orders since the earthquake in March,” he said.

He added that local demand has also tailed off.

"Last year, local demand was great until March because shoemakers here made lots of orders but since then it has steadily dropped off. Since April this year we've had almost no orders,” U Khine Myint said.(Syed Rashid Ali, Karachi, Pakistan)