Kota Kinabalu: The Sabah Rubber Industry Board (LIGS) has refuted Warisan Sabah’s allegation in social media that raw rubber cess imposed on raw unprocessed rubber taken out of the State is the cause of low rubber prices in Sabah.
The agency said as it had earlier explained in a press release, there is no export duty for processed rubber exported out of Sabah and smallholders do not pay this cess.
Abolishment of such tax will only benefit factories outside the State.
It further explained that the lower farm gate prices of rubber in Sabah compared to the peninsula are due to logistical reasons and has nothing to do with the raw rubber cess.
Raw rubber cess, it said, is to ensure that all raw rubber are processed in the State and not sent to Peninsular Malaysia or Sarawak for processing to protect the local industry.
“It is the policy of the Government to process raw rubber in the State to produce value-added SMR that can be exported to earn foreign exchange for the State as well as to provide employment to Sabahans rather than merely exporting the raw unprocessed rubber,” said the agency.
It added that dry rubber content (DRC) is always determined by standard laboratory testing that is a recognised international standard and also by actual output achieved after processing of the raw rubber from the factory.
“As LIGS buys weekly, this means smallholders sell their raw rubber which is one day to six days old.
The actual average DRC of unsmoked rubber sheets in Sabah is only 55-65 per cent and not 70-80 per cent as claimed by Warisan Sabah while for cup lumps, the actual DRC is only 48-60 per cent.
“With efficient management and cost-cutting measures, LIGS has been able to build up sufficient revolving fund in order to assist the smallholders,” the agency assured.