Dawei rubber farmers rally as plantations face closure
RUBBER farms in Tanintharyi Region are in a critical condition, as rock-bottom international prices for the raw material show no sign of rising and demand is at an all-time low, according to the regional chair of the Myanmar Rubber Planters and Producers Association (MRPPA).
As global rubber prices fell, the outlook for Myanmar’s second-largest rubber-producing region has become increasingly bleak, particularly as rubber made in Tanintharyi does not meet international quality standards, said the president of the association, U Yu Sein, and many plantations face closure. Myanmar rubber typically sells at a $400 per tonne discount to the international benchmark.
Unwilling to accept this fate, 20 plantation owners from Dawei district have joined forces to set up a private company, called Dawei Rubber Company Limited.
They plan to build a plant with new technology to produce quality rubber of an international standard and create a central market, U Yu Sein said.
“We have an initial investment of K3 billion and we are finding the land to build the processing factory. We hope to start running it this October, which is the season for extracting latex to produce rubber,” he said.
He wanted to set up a public company so that all the smallholder rubber planters in the region could buy shares, but the regulations make it hard to start a public business, he said.
The Directorate of Investment and Company Administration raised the registration fee for public firms from K1 million to K2.5 million at the end of May. Nearly 140,000 acres of rubber plantation in Dawei district is in danger of going out of business and daily workers are migrating to Thailand because owners cannot afford to pay a daily K6000 wage, U Yu Sein said.
“We want to create a central market where local farmers can sell their rubber sheets, which we will process at the factory to produce a standardised, high-quality product,” he said. “All the investors are local but the Overseas Human Resources and Industry Development Association of Japan and Japan’s Ministry of Economy, Trade and Industry will offer technical assistance and help us access international markets,” he said. With the cooperation of rubber planters, producers and logistics companies, the new business will try to connect local sellers with international buyers.
In the coming years, the government plans to develop a central rubber market for the country in Mawlamyine, the capital of neighbouring Mon State, under the National Export Strategy and a new law covering the entire rubber sector is being drafted by the Ministry of Commerce, the Ministry of Agriculture and Irrigation, and the MRPPA.
U Khing Myint, secretary general of the MRPPA, said the law will be important for every aspect of the rubber industry, from the very early stages of plantation until export.
A central market will be crucial for smallholder farmers, allowing them to sell their products at a fair price, and it will also help improve quality control, he said. “A central market won’t make international rubber prices recover, but it can help Myanmar producers to sell their rubber for the global market price.” The international price of Rubber, No 3 Smoked Sheet (RSS3) is around $1700 per tonne but the Myanmar-made equivalent sells for around $1300.
A worker pulls apart sheets of rubber in Mawlamyine.