Rich earnings for rubber planters
KUALA LUMPUR: Rubber smallholders are enjoying record high incomes with Standard Malaysian Rubber (SMR) reaching peak prices in recent months, the Rubber Industry Smallholders Development Authority (Risda) said.
The free-on-board (FOB) price of tyre-grade rubber (SMR 20) has been rising steadily recently, reaching a peak of RM13.35 per kg on Nov 11.
The smallholders usually sell unprocessed rubber at the farm-gate level for an average of 50 to 55 per cent of the FOB price, after discounting for water content and other costs, such as transportation, processing, storage, and traders' and dealers' margins.
Izat said FOB prices could remain high, fluctuating between RM9.50 and RM12 per kg over the next five years, if China and India's economies continued to grow at their current rate. He said more needed to be done to encourage local production of rubber, which has declined steadily in the past five years dropping to 857,000 tonnes last year from 1,284,000 in 2006.
Izat added that Risda was doing all it could to spur production and combat the problem of rapidly decreasing areas of rubber land in Peninsular Malaysia.
"We have increased replanting grants, and are starting to move in to Sabah and Sarawak to increase the size of rubber land -- there are about one million hectares of potential rubber land in Sarawak alone."
Risda figures indicate that the annual price of SMR 20 has risen steadily from RM7.10 per kg in 2006 to RM8.31 in 2008 with the upward trend continuing this year despite dropping to RM6.37 per kg last year.
Its director-general Datuk Muhammad Izat Hasan said the average smallholder producing about 1,000kg of raw rubber daily could take home up to RM5,550 a month.
The free-on-board (FOB) price of tyre-grade rubber (SMR 20) has been rising steadily recently, reaching a peak of RM13.35 per kg on Nov 11.According to Risda's records, local smallholders own an average size of 2.3ha with 800 trees.
"Of course, their income can be further affected by other factors such as the number of trees, tree density, the amount of latex tapped per tree, and the frequency of tapping."
Izat said smallholders could take further advantage of the high price of SMR 20 by replanting on old rubber land, bypassing dealers and selling directly to factories, and carrying out good agriculture practices.
"We can ride the high prices for at least another five to six years if we replant now."
He said prices for tyre-grade rubber, which accounted for 70 per cent of the world's rubber production, was unlikely to drop as long as the demand remained high in countries such as China and India.
"These two economies are experiencing high growth rates and their demand for cars and tyres has spurred the global rate of demand to 9.5 per cent per annum over the past seven years. In comparison, the world's supply of rubber has only increased at a rate of 3.5 per cent per annum over the past decade."
Izat said FOB prices could remain high, fluctuating between RM9.50 and RM12 per kg over the next five years, if China and India's economies continued to grow at their current rate. He said more needed to be done to encourage local production of rubber, which has declined steadily in the past five years dropping to 857,000 tonnes last year from 1,284,000 in 2006.
Izat added that Risda was doing all it could to spur production and combat the problem of rapidly decreasing areas of rubber land in Peninsular Malaysia.
"We have increased replanting grants, and are starting to move in to Sabah and Sarawak to increase the size of rubber land -- there are about one million hectares of potential rubber land in Sarawak alone."
Risda figures indicate that the annual price of SMR 20 has risen steadily from RM7.10 per kg in 2006 to RM8.31 in 2008 with the upward trend continuing this year despite dropping to RM6.37 per kg last year.
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