Working towards greater community control over land, forests and natural resources

Answer to low rubber price found

Vientiane Times, 6 November 2014

Rubber trading companies have promised to pay more for raw rubber in a bid to assist local growers who are suffering from the plummeting price of rubber in Luang Namtha province. They will purchase the rubber tapped in November this year at around 6,600 kip per kg (5 Yuan) up from the previous 4,100 kip (3.2 Yuan) per kg, according to the provincial Commerce and Industry Department. The price of rubber has been dropping continuously and plummeted in October to a record low for the year. The very low price of rubber sold in October at 4,100 kip (3.2 Yuan) per kg resulted in dissatisfaction among the local people who became discouraged about continuing to harvest the product, Department Director Mr Phonxay Chanthasone said.

He said that some rubber growers decided to sell their plantations, while others simply destroyed their trees and switched to growing other commercial crops such as bananas and sugarcane. In addition, the fall in the rubber price resulted in many families going into debt because they borrowed money from the banks to plant their rubber trees, Mr Phonxay added.

He said most of the companies purchased their rubber at the low price, while some of them suspended their purchasing because currently there are around 4,000-6,000 tonnes of rubber stockpiled in the province and rubber extraction this month is expected to add a further 2,000 tonnes. On this matter, the department, on behalf of the provincial Committee for Rubber Price Supervision, held several consultations to find solutions towards raising the rubber price to protect the livelihoods of the rubber growers and investors in the province. At the latest meeting, the provincial authorities met rubber growers and trading companies to consult on ways to solve the fall in the rubber price in a bid to assist local people. The people attending said that the cause of the huge drop in price stemmed from changes to world consumption and, with many families relying on rubber trees and extraction to earn their living, they faced difficulties when the price of rubber went way down.

At the consultation meeting, they agreed that all companies that had invested in rubber tree plantations in the province should lend a hand to the people in the districts within their investment. The authorities also suggested that the companies limit their rubber purchases from other neighbouring provinces and only buy rubber from within the province. Acting on behalf of the rubber processing association in the province, Yunnan Rubber Company agreed to purchase the last batch of rubber which is being tapped this month at a cost of around 6,600 kip (5 Yuan). The provincial authorities asked all the relevant companies to assist the people in their district and proposed the government consider implementing suitable policies for the companies. The provincial committee for rubber price supervision agreed to establish a suitable policy related to customs obligations by calculating fees and maintaining correct accounts according to enterprise law. The accounts should be handed over to the deputy governor of each district and to the relevant offices to implement and report to provincial authorities normally.

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