Re­form­ing the rub­ber in­dus­try

The Myanmar Times - - Front Page - SU PHYO WIN su­phy­owin@mm­

Rub­ber sec­tor ex­perts iden­ti­fied low pro­duc­tiv­ity and poor qual­ity as the main is­sues pre­vent­ing rub­ber ex­ports from reach­ing their po­ten­tial.

LOW pro­duc­tiv­ity, high labour costs and sub-par qual­ity are hold­ing Myan­mar back from be­com­ing a se­ri­ous rub­ber pro­ducer, ex­perts say. The na­tion’s rub­ber plan­ta­tions pro­duce at less than half the in­ter­na­tional pro­duc­tion rate, and a rise in vol­ume must be matched by im­prove­ments in prod­uct qual­ity, says Ha­jime Kondo, man­ager of Bridge­stone’s tyre ma­te­ri­als ad­vanced de­vel­op­ment de­part­ment.

But grow­ers com­plain that at cur­rent world rub­ber prices, they don’t earn enough in­come to pay a labour force in­creas­ingly at­tracted to job op­por­tu­ni­ties else­where, both in Myan­mar and over­seas.

“While other coun­tries pro­duce 1.5 tonnes of rub­ber per hectare, Myan­mar pro­duces 0.8 tonnes. And Myan­mar is very dif­fer­ent from other coun­tries in terms of fix­ing rub­ber grad­ing,” said Mr Kondo.

A re­cent seminar in Yan­gon Re­gion on the sus­tain­able nat­u­ral rub­ber ini­tia­tive (SNR-i) al­lowed in­dus­try pro­fes­sion­als to share in­for­ma­tion about the nat­u­ral rub­ber sup­ply chain.

“Three years ago, Ja­pan launched a project to sup­port Myan­mar nat­u­ral rub­ber by im­prov­ing the qual­ity. A sys­tem of nat­u­ral rub­ber lab­o­ra­to­ries was to be es­tab­lished with the goal of cer­ti­fy­ing qual­ity to in­ter­na­tional stan­dards,” said Mr Kondo.

“The train­ing of lab staff is com­plete, and the equip­ment has been in­stalled. Later this year, the In­ter­na­tional Rub­ber As­so­ci­a­tion will cer­tify the lab,” he said, adding that Ja­panese con­sumers had be­gun im­port­ing Myan­mar rub­ber as its qual­ity im­proved.

“Im­ports have in­creased a great deal over the past three years. Once the IRA cer­ti­fi­ca­tion is re­ceived, in­ter­na­tional con­sumers will be able to im­port Myan­mar nat­u­ral rub­ber more eas­ily.”

As to the ques­tion of qual­ity, some of the cer­ti­fied seeds used un­der the pre­vi­ous govern­ment were not very suit­able for Myan­mar’s geo­graph­i­cal po­si­tion, said U Aung Myint Htoo, pres­i­dent of the Myan­mar Rub­ber Planters and Pro­duc­ers As­so­ci­a­tion (MRPPA).

“Some re­gions and states are plant­ing seeds in­her­ited from other coun­tries and not tested for some years. The pre­vi­ous agri­cul­ture min­istry cer­ti­fied and reg­is­tered those seeds, but the yield is not good,” he said.

“This ques­tion is not re­ally re­lated to the world­wide fall in rub­ber prices. If planters chose qual­ity seeds, they could sur­vive. Only a few small-scale rub­ber planters have quit the in­dus­try. That doesn’t mean Myan­mar’s whole rub­ber in­dus­try is go­ing to shut down,” he said.

Nev­er­the­less, low prices do re­duce the in­dus­try’s in­come, com­pli­cat­ing ef­forts to im­prove qual­ity, said U Aung Myint Htoo.

“Myan­mar rub­ber ex­ports go mostly to China. Ja­pan wants to im­port, and we’ve been in ne­go­ti­a­tions with them, but will do so only if Myan­mar can meet Ja­pan’s qual­ity de­mands. The Chi­nese im­port our rub­ber be­cause of the lower price, and with that level of qual­ity it’s hard to find an­other mar­ket,” he said.

Since hit­ting a spike about five years ago, rub­ber prices have de­clined from a high of nearly 280 US cents per pound to as low as 65 cents (Sin­ga­pore Com­mod­ity Ex­change (SICOM), prices quoted for No 3 Smoked Sheet, RSS3 stan­dard). At the same time, the pool of farm labour has shrunk, grow­ers say.

Small­holder U Kyaw Zwar, who owns the 20-acre (8-hectare) Sein Lan Pyae Sone rub­ber farm, said, “When we push labour harder to con­trol qual­ity, they leave for other farms, or go to Thai­land. We only pay them about K3000 a day, so they can find other farm­ers who can pay more. In the year 2010, our rub­ber was earn­ing K1850 a pound, but now we only get K700 a pound. We can’t af­ford to pay our work­ers more.”

The low price is com­pounded by the poor pro­duc­tiv­ity, said MRPPA vice pres­i­dent U Myo Thant. “We could pay a third of our in­come to our labour force if we were grow­ing 1500lbs an acre. But a farmer pro­duc­ing only 700lbs an acre can­not pay 500lbs’ worth of in­come to his work­force. It’s hard to im­prove rub­ber qual­ity and get good labour as well,” he said.

Things may be slightly bet­ter for plan­ta­tions op­er­at­ing on a larger scale. Some mid­dle-range pro­duc­ers said most of the Chi­nese de­mand was for RSS3. None seem to plan to leave the in­dus­try.

U Nay Moe Myint, the owner of the 250-acre Cho plan­ta­tion in Mawlamyine, Mon State, said low pro­duc­tiv­ity was the re­sult of low prices and slen­der ex­port vol­umes.

“Chi­nese de­mand is pretty steady. Myan­mar can’t pro­duce much rub­ber, and some small-scale grow­ers have stopped pro­duc­tion,” he said.

U Myo Aung, man­ag­ing di­rec­tor of Yoma Top com­pany, which ex­ports nat­u­ral rub­ber to Hong Kong and In­dia, said lo­cal tyre com­pa­nies were seek­ing to buy more rub­ber.

“We sell to the Yan­gon Tyre Com­pany, and we’ve been get­ting a bet­ter price than if we’d ex­ported. Ja­pan has been try­ing to im­port Myan­mar nat­u­ral rub­ber, but they’re wait­ing for the qual­ity to im­prove. They said if we met their qual­ity stan­dard, we could get the same price as other pro­duc­ers through­out the world,” he said.

More than 90 per­cent of Myan­mar rub­ber is ex­ported, mostly to China. But the higher prices be­ing of­fered by lo­cal cus­tomers are a good sign, said U Myo Aung.

“I have a 1200-acre plan­ta­tion in Bago that pro­duced 100 met­ric tonnes of rub­ber last year. We es­ti­mate we will pro­duce 140MT this year,” he said, at­tribut­ing the in­crease to high-qual­ity seeds.

Ac­cord­ing to the MRPPA, there are 734,436 acres (293,774ha) un­der cul­ti­va­tion, pro­duc­ing 227,533MT in the cur­rent year.

Photo: EPA

Nat­u­ral rub­ber farm worker Win Latt col­lects milky white la­tex from a rub­ber plant in Dawei town­ship in 2012.

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