KUALA LUMPUR: Malaysia has pledged to refrain from selling rubber below the US$1.50 (RM4.89) per kg average production cost, in a collective effort to shore up prices from five-year lows as global demand for the commodity remains flaccid.
Benchmark rubber futures on the Singapore exchange remained below US$1.50 yesterday, trading at US$1.46 per kg, not much bounce from the trough of US$1.37 on October 1, which was its weakest since March 2009.
“We cannot force but we urge rubber producers not to sell natural rubber below the production cost. In the longer term, prolonged weak prices can result in supply cuts and will negatively impact downstream industries in consuming countries,” said Plantation Industries and Commodities Minister Datuk Douglas Uggah Embas.
“Malaysia pledges firm support to the proposal not to sell rubber below US$1.50 per kg. Let this be the litmus test on our resolve and solidarity in overcoming the current price crisis,” Uggah said after officiating at the opening of the Association of Natural Rubber Producing Countries conference, here, yesterday.
The International Tripartite Rubber Council, which represents government officials, growers and exporters from Thailand, Indonesia and Malaysia, suggested accelerated rubber replanting and finding new use for rubber, particularly, in road construction.
Uggah highlighted Malaysia’s plan to replant 50,000ha of rubber trees that were older than 20 years with higher yielding clones.
He said the same replanting rates were applicable to smallholders — RM9,230 per hectare in Peninsular Malaysia, RM14,000 in Sabah and RM13,000 in Sarawak.
Also present at the conference was Malaysian Rubber Board director general Datuk Dr Salmiah Ahmad.
She said Malaysia intends to start embarking on rubberised roads by mid-2015.
“Rubberised roads are slightly more expensive but do not require that much maintenance compared with conventional roads. For every kilometre, we can use some 3.3 tonnes of natural rubber to give better grip and rolling resistance for the safety of users,” she said.
On rubber tree replanting, Salmiah said it was a means to improve smallholders’ economic well-being.
“It also ensures a sufficient future supply of raw materials for the
tyre-making and medical devices manufacturing industries,” she added.
– Business Times