Vientiane Times, 27 August 2014
The number of rubber plantations in Luang Namtha province has continued to increase despite the fact the rubber price has been declining steadily over the past few years. The rubber price began to fall back in 2011 and the price of the commodity on the world market has remained low ever since, Mr Sawaeng Sivilay, an official from the provincial domestic trade section, said.
Mr Sawaeng told Vientiane Times yesterday that the rubber price in Laos reached as high as 15,000 kip per kilogramme in 2010 but in the last few years it dropped to around 7000-8000 kip per kilogramme. Currently rubber prices have fallen to as low as 6,000 kip per kilogramme, he added.
According to the provincial agriculture and forestry sector, despite the collapse of the rubber price in Laos there has still been a more than 10 percent increase in the number of plantations. Currently, Luang Namtha still has almost 30,000 hectares of rubber trees and the trend is expected to continue in the years ahead, Mr Sawaeng predicted.
However the provincial authorities have declared they will stop granting land concessions for commercial rubber plantations but the authorities will continue to allow local people to grow rubber trees on their land if they wish to. Mr Sawaeng said despite the fact the rubber price had decreased in recent times there was still high demand for the product on the world market and he believed that the price would improve when supply was insufficient to meet this demand. However, due to the price collapse some local people have converted lands previously under rubber to the cultivation of other crops as rubber is not currently seen as commercially viable.
Many people are of the view that the government should set a floor price for rubber at the farm gate in order to protect the interest of farmers because currently the rubber companies have the upper hand when it comes to purchasing. Throughout Luang Namtha, and as is the case in other parts of the country, farmers are still struggling to see fairness and transparency in trading.
Luang Namtha has the largest number of rubber plantations of any province in the country, being so close to China, and the majority of the rubber investors are of Chinese origin. The product has helped improve the living conditions of local families who work with the companies and sell their goods, Mr Sawaeng said. Rubber products have also contributed to provincial economic development and poverty reduction. Last year, the province earned more than US$13 million from rubber exports to China.
The provincial Industry and Commerce Department has set up a team to monitor the rubber price on the world market in a bid to protect the interests of rubber growers, Mr Sawaeng said. The department is also boosting cooperation in trading between the province and China, he added.