Cambodian Rubber Exports To Rise Significantly

Record high prices are luring foreign rubber exporters and consumers to invest in new plantations in Cambodia and its output could double in five years, a senior Cambodian agricultural official said on Monday (Feb 21).
"Vietnam has already started growing rubber in Cambodia and there are other countries such as China and Singapore that are in talks with us about growing rubber here," said Ly Phalla, director general for rubber at Cambodia's Agriculture Ministry.
Ly Phalla told Reuters on the sidelines of a rubber meeting in Siem Reap that Vietnam had started growing rubber on 120,000 hectares (296,500 acres) a couple of years ago and the trees should be mature enough to start producing latex in around five years.
"It's because of the high prices. That's why we welcome foreign investors by giving them incentives," he said, adding that investors could get land concessions for as long as 99 years.
Tokyo rubber futures prices, which set global trends, hit a record high of 535.7 yen ($6.44) per kg on Feb. 18 because of supply concerns and hefty speculative buying by investment funds.
Surging futures prices have pushed physical rubber higher, with the benchmark Thai RSS3 offered at a record high of $6.40 per kg.
Cambodia is the world's ninth-biggest rubber producer, with around 40,000 tonnes a year at the moment, according to the Association of Natural Rubber Producing Countries (ANRPC).
Most current output is produced by small farmers. With the arrival of foreign investors, production is expected to double to 80,000 tonnes by 2015, Ly Phalla said.
Production is expected to rise further to 240,000 tonnes by 2020, when rubber plantations could cover 300,000 hectares, Ly Phalla said.
"All of our rubber production is for export as we don't have any domestic downstream industry that is capable of consuming the rubber we produce," he said.
(Reuters, February 21, 2011)