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KUALA LUMPUR, May 23 (Bernama) — The Plantation Industries and Commodities Ministry says the current drop in rubber prices is due to supply exceeding the demand from consumer countries like China, Japan, the United States and European countries.
Slower economic growth, lacklustre markets, the fall of the US dollar and speculation on commodities markets like the Tokyo Commodity Exchange (TOCOM), which reflects market trends, also contribute to the low rubber prices, it said.
The situation could worsen if Thailand decides to go ahead with a plan to sell 200,000 tonnes of stockpiled rubber, it said in a statement today.
The ministry dismissed allegations by certain quarters that the rubber price slump was caused by a cartel comprising large companies such as Lee Rubber Sdn Bhd and Lam Seng Manufacturing Enterprises Sdn Bhd.
It said Lee Rubber, a member of the Malaysian Rubber Exchange (MRE) price advisory panel, often gives the highest quotations, but added Lam Seng is not a member of the panel, which it said does not act like a cartel but was created to ensure rubber prices in the local market reflect the prices on international markets.
The list of panel members, who are appointed every two years, is on the Malaysian Rubber Board’s official portal, it said.
The ministry urged smallholders to refer to the board’s official prices before accepting the prices offered by middlemen.
It said it has proposed a plantation-level price regulation mechanism for consideration by the Cabinet, aimed at reducing the number of layers of middlemen and price fixing by them while enhancing price transparency and offering smallholders reasonable prices.
Cooperation among relevant government agencies would be increased to encourage smallholders to diversify into other economic activities and not depend entirely on rubber sales revenue, it added.
— BERNAMA
