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

Rubber prices may decrease in Luang Namtha

Vientiane Times, 23 April 2015

Some 500 to 600 hectares of rubber plantation in Sing district, Luang Namtha province are currently being destroyed by the owners of the plantations due to the slump in prices, according to a trade official. The rubber price on the world market has continuously declined over the past few years and consequently the rubber price in Laos has crashed as well.

Head of the province’s Domestic Trade Section under the Industry and Commerce Department Mr Sawaeng Sivilay told Vientiane Times yesterday that the buyers and the provincial trade sector are currently working together to address the issue. “As the price of rubber on the world market is continuing to drop each year, it directly poses a negative impact on the price of rubber in Laos,” he said. “We are now discussing with the relevant sectors at the provincial level to ease the problem by providing Chinese buyers with exemptions to the paper process for goods transport and other expenses,” Mr Sawaeng said. “By doing so, it will encourage buyers to be able to buy more products from local farmers,” he said, adding that authorities also continue to inform farmers to be patient while waiting for better prices in the years to come. The rubber price on the world market was recorded at 12.8 Yuan per kilogramme or around 16,661.78 kip per kilogramme during the first three or four months of last year, according to Mr Sawaeng.

“If we compare to the same period last year, the price will be over 11 Yuan per kilogramme. It means the rubber price has been steadily decreasing every year,” Mr Sawaeng said. 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. Back to the year 2008, the rubber price was 18 Yuan per kilogramme (more than 23,000 kip) but the price began to drop in 2011 due to the need to increase despite the fact the rubber price has been declining steadily over the past few years. Mr Sawaeng also said that the rubber price in Laos was at 15,000 kip per kilogramme in 2010 but in the last few years it dropped to around 7,000-8,000 kip per kilogramme.

Last year, the rubber prices have fallen to as low as 4 Yuan (more than 5,000 kip) per kilogramme and the province’s trade section believes that it will continue to drop lower than last year. Recently Luang Namtha has reported that it was expected to have almost 30,000 hectares of rubber trees but after the price kept falling steadily, the authorities are unsure about the exact areas of plantation that remain in the province. “We have to recollect the data of rubber plantations to be sure how many hectares of rubber plantation we have in the province. We aim to conclude the study by the end of next month,” 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.

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