rubber sector profile - ministry of commerce · 2014-08-28 · ii! preface!...

Rubber Sector Profile

Value Chain Unit

Trade Promotion Department

Ministry of Commerce, Cambodia

July 2012

(Draft – please do not cite)

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Preface The Rubber Sector Profile was prepared by the members of the Value Chain Information Unit within the Trade Promotion Department of the Ministry of Commerce: Ms. Bun Chamnan, Ms. El Chenda, Mr. Chea Vorak, Mr. Sean Sophea, and Mr. Tim Raya.

The Value Chain Information Unit was supervised by Mr. Kith Pheara (Trade Promotion Department), and supported by Dr. Michael Freudenberg (adviser, Trade Promotion Department) and Mr. Buntong Borarin and Mr. Tim Raya (national consultants, Trade Promotion Department).

The Ministry of Commerce gratefully acknowledges financial support from the Trade Development Support Programme (TDSP), which is supported by the European Commission, Danida and UNIDO, and managed by the World Bank.

Abbreviations and acronyms ANRPC Association of Natural Rubber Producing Countries

AfD Agence française de développement

CARDI Cambodian Agriculture Research and development Institute

CDC Council for the Development of Cambodia

CEDAC Centre d'Etude et de Développement Agricole Cambodgien

FAO Food and Agricultural Organization (United Nations)

GRET Groupe de Recherche et d'Echanges Technologiques

IRSG International Rubber Study Group

ITC International Trade Centre (United Nations)

IRSG International Rubber Study Group

MAFF Ministry of Agriculture, Forestry and Fisheries

MEF Ministry of Economy and Finance

MIME Ministry of Industry, Mining and Energy

MLMUPC Ministry of Land Management, Urban Planning and Construction

MoC Ministry of Commerce

MOWRAM Ministry of Water Resources and Meteorology

MPWT Ministry of Public Works and Transport

NBC National Bank of Cambodia

RDB Rural Development Bank

RUA Royal University of Agriculture

RULE Royal University of Law and Economics

SORE State-‐owned rubber estate

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Contents WHY A SECTOR PROFILE ON RUBBER? ........................................................................................................... 1 STRUCTURE OF THE REPORT .......................................................................................................................... 2 WORLD RUBBER MARKET .............................................................................................................................. 3

Main rubber producers ...................................................................................................................................... 3 Cambodia’s rubber production .......................................................................................................................... 5 Cambodia’s rubber production by Province .................................................................................................... 10 International trade statistics for rubber .......................................................................................................... 11 Main rubber exporters .................................................................................................................................... 12 Cambodian rubber exports and main markets ................................................................................................ 14 Main importers ................................................................................................................................................ 16 Cambodia’s place in world rubber production, exports and imports .............................................................. 18 Prices ............................................................................................................................................................... 18

CAMBODIA’S RUBBER VALUE CHAIN: MAIN ACTORS, ACTIVITIES, AND CONSTRAINTS ................................. 20 Main activities and actors in Cambodia’s natural rubber value chain ............................................................. 20 Cultivation ........................................................................................................................................................ 21 Collecting and trading ...................................................................................................................................... 28 Processing ........................................................................................................................................................ 31 Exporting .......................................................................................................................................................... 34 Summary and SWOT analysis of the rubber sector in Cambodia .................................................................... 38

STRATEGIES AND ACTIVITIES TO SUPPORT CAMBODIA’S NATURAL RUBBER SECTOR ................................... 39 Government strategy ....................................................................................................................................... 39 Activities by government ................................................................................................................................. 39 Activities by other stakeholders ...................................................................................................................... 42

RECOMMENDATIONS .................................................................................................................................. 42 OUTLOOK AND INVESTMENT OPPORTUNITIES ............................................................................................ 46

Outlook ............................................................................................................................................................ 46 Potential markets for Cambodia to diversify its exports ................................................................................. 47 Investment opportunities ................................................................................................................................ 48

REFERENCES ................................................................................................................................................ 50 Main references ............................................................................................................................................... 50 Further readings .............................................................................................................................................. 50 Websites .......................................................................................................................................................... 51

ANNEX ........................................................................................................................................................ 52

Rubber Sector Profile 1

Why a sector profile on rubber? Rubber has long been a major commercial crop and export earner for Cambodia, and the sector has the potential for increased exports and value addition. Rubber is among the 19 product and service sectors with potential for export diversification, according to Cambodia’s Trade Integration Strategy 2007 launched by the Royal Government of Cambodia (DTIS, 2007). A survey among 24 Provincial Departments of Commerce reveals that rubber is among the “Top Ten Products” in five Provinces: Kampong Cham, Kratie, Pailin, Ratanakiri and Stung Treng.

The Royal Government of Cambodia has realized that natural rubber plays a key role in the socio economic development of Cambodia. The employment directly involved in this sector is estimated around 27,000, and if subcontracting companies and seasonal work are included, the number of direct and indirect jobs is close to 40,000 (EIC, 2007). As a result, the rubber sector generates rural income, alleviates poverty, and through rural employment prevents farmers’ emigration to the cities. Moreover, rubber also contributes to the environmental protection by creating green canopy, maintaining the natural balance, and preventing soil erosion (MAFF, 2012).

A strong increase in rubber prices on international markets during the past decade has generated considerable interest from both domestic and foreign investors in the sector in Cambodia. However, the rubber business is risky: Rubber has high potential income, but rubber trees yield latex only at least five years after planting, and income is uncertain because of prices are very volatile. The outlook for the global natural rubber sector is regarded as favourable, and despite the many challenges to overcome, there are significant opportunities for investment and market diversification for the rubber sector in Cambodia. The Government targets a total planted area for rubber of 300,000 hectares, of which 235,000 hectares for harvesting, yielding an average production of 290,000 tons by 2020 (Ly, 2011).

Table 1. The rubber sector at a glance 2009 2010 2011 2020

(target or estimate) World

Main producers (Share in 2010) Thailand (29%), Indonesia (27%), Malaysia (8%), India (8%), Vietnam (7%), China (7%) Cambodia (0.4%, rank 16)

Main exporters (Share in 2010) Thailand (33%), Indonesia (31%), Malaysia (12%), Vietnam (5%) Cambodia (0.3%, rank 19)

Main importers (Share in 2010) China (24%), United States (13%), Japan (10%), Malaysia (8%), Germany (5%), Korea (5%) Cambodia (0.0%, rank 128)

Cambodia

Total area planted (ha) 129,920 181,433 213,104 300,000* Area tapped (mature trees only) (ha) 34,135 38,406 45,162 235,000*

Production (dry rubber) (tons) 37,380 42,466 51,339 290,000* Yield (kg/ha) 1,095 1,100 1,140 1,235*

Main producing provinces Kampong Cham, Ratanakiri, Kampong Thom, Kratie Types of plantations Smallholders; Private-‐owned plantations (agro-‐industries); Economic land concession

(ELC) companies Number of plantations .. .. .. ..

Plantation size Ranging from about 2 ha (smallholders) to more than 6,000 ha (Chup) Employment About 40,000 direct and indirect jobs

Number of processors .. .. .. .. Main processed products Mainly CSR L and CSR 5, but also CSR 10 and CSR 20 (for which world demand is strong)

Price for Malaysian rubber RSS (USD/ton) 3,650 4,820 3,100** Exports of “Natural rubber, HS 4001” (tons) 31,469 27,031 .. ..

Main export product Cambodian statistics: “Natural rubber in other forms (HS 400129)” Partner statistics: “Technically specified natural rubber TSNR (HS 400122)”

Main export markets Vietnam, China, Malaysia

Source: Taken from various tables in this report, based on ITC’s Trade Map, World Bank, MAFF. * Government target; ** Forecasted by World Bank.

2 Rubber Sector Profile

Structure of the report A simplified model of the value chain in Cambodia’s natural rubber sector is presented in Figure 1. There are different ways of looking at the value chain (DFID, 2008), including:

− What are the main activities in the value chain?

− Who are the main actors involved in these activities and what do they actually do?

− What are the flows of products, information and knowledge? For example, where do the inputs / products / services come from and where does the output go?

− How does the value change along the chain and where is the highest value addition?

− What types of services are feeding into the value chain?

− What is the location and position of selected groups (e.g. the poor, women) in the chain?

− What are the key constraints in each stage?

− What are potential solutions to these constraints?

Figure 1. Simplified model of the value chain in Cambodia’s natural rubber sector

The main steps in this report are the following. We will successively:

− Identify the main activities and actors in each stage of the value chain;

− Analyse the main constraints (“Where does the sector stand today?”);

− Find out if there is a government strategy for the sector (“Where does the government want the sector to be in the future?”);

− Identify the main activities to support the sector, both by government and other stakeholders (including development partners); and finally,

− Suggest possible solutions to address these issues.

Provision of inputs Culovaoon Collecoon Processing Distribuoon /

Exporong


World rubber market

Main rubber producers

There are three main sources of information on natural rubber production in the world:

− The Food and Agricultural Organization (FAO) of the United Nations provides statistics on natural rubber since 1961, including on production, area harvested, and yield. According to FAO, world production of natural rubber (abbreviated to NR) grew by a factor of five in the past 50 years, from about 2 million tons in 1961 to more than 10 million tons in 2010 (Figure 2). However, world natural rubber production has somewhat dropped since the historic peak of 2008, and appears to be mainly due to the slump in the global auto industry following the global economic downturn. FAO reports statistics on natural rubber production for 29 countries, including Cambodia.

− The Association of Natural Rubber Producing Countries (ANRPC) is another source for statistics on natural rubber. ANRPC (www.anrpc.org) is an inter-‐governmental organisation established in 1970, whose membership is open to the governments of countries that produce natural rubber. ANRPC currently has 11 members, all located in Asia: The governments of Cambodia (since 2009), China, India, Indonesia, Malaysia, Papua New Guinea, Philippines, Singapore, Sri Lanka, Thailand and Vietnam. Together, the 11 ANRPC members accounted for 90% of the global natural rubber production in 2010.

− The International Rubber Study Group (IRSG, www.rubberstudy.com), which comprises 16 member countries and provides a forum for discussing the world’s supply and demand for rubber, pretends to be “the authoritative source of rubber statistics”. IRSG publishes data on production, consumption, trade and prices on a quarterly basis in Rubber Statistical Bulletin. An annual subscription costs 3,000 Singapore dollars, as is also the case for the quarterly Rubber Industry Report and the twice-‐yearly World Rubber Industry Outlook. IRSG statistics were almost identical to FAO statistics in the early 2000s, but have become increasingly lower than FAO data in recent years (Figure 2). According to Evans (2011), Secretary-‐General of the IRSG, the value of natural rubber in the world is expected to exceed USD 50 billion in 2011.

Figure 2. Natural rubber production in the world according to FAO (million tons)

Source: FAO, FAOSTAT; IRSG; ANRPC, Monthly Bulletin December 2010 (www.anrpc.org/html/archive.aspx).

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Thailand and Indonesia are the leading natural rubber producers in the world. While the rubber tree (Hevea brasiliensis) is native to the Amazon region, it is now cultivated in all tropical regions, in particular in Asia. By far the largest producers of natural rubber are Thailand (3 million tons in 2010) and Indonesia (2.8 million tons), together producing more than 50% of world output (Table 2). Other large producers are also in Asia: Malaysia, India, Vietnam, China, and the Philippines. All large rubber producers in the world are members of the Association of Natural Rubber Producing Countries (ANRPC). The largest rubber producers that are not members of ANRPC are Brazil, Côte d'Ivoire and Nigeria, which are ranked respectively number 8, 9 and 10 in the world.

Table 2. Natural rubber producers in the world Level 2010 Dynamism 2010 (Index 2000=100)

Production (1,000 tons)

Area harvested (1,000 ha)

Production Area harvested

1. Thailand # 3,052 1,929 134 132 2. Indonesia # 2,788 3,065 186 128 3. Malaysia # 859 1,290 93 99 4. India # 851 450 135 113 5. Viet Nam # 754 439 259 189 6. China # 691 685 143 163 7. Philippines # 395 138 554 170 8. Brazil 222 124 253 132 9. Côte d'Ivoire 215 135 174 205 10. Nigeria 143 345 134 105 (…) 16. Cambodia # 38 36 89 104 (…) World 10,537 9,244 152 126

Source: FAO, FAOSTAT. # Members of the Association of Natural Rubber Producing Countries (ANRPC). There are 29 natural rubber producing countries in the FAO database. For more information, see Annex Table 1.

Thailand has had spectacular growth in rubber production since the mid-‐1980s, first overtaking Indonesia to become number two in the world, and shortly thereafter overtaking Malaysia as number one in the world (Figure 3). Malaysia, that used to be by far the largest rubber producer in the world, has experienced a decline, and could –if the trend continues—soon be overtaken by India and Vietnam.

Figure 3. Natural rubber production in the largest producers in the world, 1961-‐2010 (million tons)

Source: FAO, FAOSTAT.

Thailand(

Indonesia(

Malaysia(

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According to FAO, Cambodia is the 16th largest among the 29 natural rubber-‐producing countries in the world, with a production of 37,500 tons in 2010 (Table 2). While world production increased by 52% between 2000 and 2010 (Index=152, due to an increase in yield of 20% and of the area harvested of 26%), Cambodia’s production in 2010 was 11% lower than in 2000 (Index=89), mainly because of a 15% drop in yield.

Cambodia’s rubber production

The total area under cultivation in Cambodia in 2011 was more than 210,000 hectares, according to the General Department of Rubber (GDR) in MAFF, which produces Cambodia’s official statistics on natural rubber (Table 3). However, only a part of this total area is productive, as only mature rubber trees can be tapped. The area for tapping in 2011 was about 45,000 ha, producing more than 51,000 tons of natural rubber. The difference, about 168,000 ha, is used for maintenance, i.e. either for replanting trees on existing orchards, or planting of new trees.

Table 3. Cambodia’s cultivation, production and exports of natural rubber Year Total planted

(ha) Immature area

(ha) Mature area

(ha) Production

(tons) Yield

(kg/ha) Exports (tons)

1922 1,224 1,224 0 0 0 .. 1930 22,959 21,159 1,800 482 268 .. 1940 27,977 1,970 26,007 19,988 768 .. 1950 30,386 8,207 22,179 15,295 690 .. 1960 41,644 13,220 28,424 37,109 1,306 40,466 1967 64,054 24,907 39,147 53,716 1,372 47,655 1980 5,000 0 5,000 1,300 260 1,454 1990 51,160 38 51,122 34,700 680 25,563 2000 53,722 11,024 42,698 42,007 980 40,066 (…) 2005 60,406 30,004 30,402 29,464 960 29,950 2006 69,994 37,604 32,390 32,077 990 31,184 2007 82,059 51,568 30,491 32,975 1,080 33,121 2008 108,510 74,197 34,313 37,050 1,080 36,000 2009 129,920 95,785 34,135 37,380 1,095 36,500 2010 181,433 143,027 38,406 42,466 1,100 45,000 2011 213,104 167,942 45,162 51,339 1,137 44,969

Source: MAFF (2011), referring to Association des planteurs de caoutchouc au Cambodge (APCC), SONEXIM (1967); update for 2011 from MAFF Annual Report (2011). For all years, see Annex Table 6 and Annex Table 7.

Long-‐term statistics show important ups and downs for Cambodian rubber production since the 1960s, although there are differences in terms of magnitude and years for which there are official data between MAFF (Figure 4) and FAO (Annex Figure 1). Rubber has been planted in Cambodia since 1910, and large-‐scale rubber plantations were introduced in the early 1920s (Box 1). By the mid-‐1960s, Cambodia produced more than 50,000 tons of natural rubber, and was among the ten largest producers in the world. However, output declined sharply in the 1970s during the Vietnam War and the Khmer rouge period, although there are no official figures during that period. FAO data for most years between 1975 and 1995 are unofficial, or estimated by FAO, but suggest that production resumed gradually since a historic low in 1981. MAFF does not seem to have data between 1968 and 1979, and the reported production for 1980 was only 1,300 tons. Production levels then increased irregularly until about 2000, decreased until 2005, and increased again thereafter. Comparable production levels to the mid-‐1960s were almost attained in the mid-‐1990s, i.e. roughly 35 years later, but even in 2011 they have not yet fully reached the peak of 1967 (53,000 tons). Strangely, the data of the mid-‐2000s that are labelled as “official” by FAO differ sometimes substantially from official MAFF data.

Cambodia’s rubber production in a few years will be substantially higher than today due to the strong current (re-‐)planting. The Government targets a total planted area for rubber of 300,000 hectares, of which 235,000 hectares for harvesting, yielding an average production of 290,000 tons by 2020 (Ly, 2011).


Figure 4. Natural rubber production in Cambodia, 1921-‐2011

Source: MAFF (2011), see Annex Table 6 and Annex Table 7.

Box 1. Brief history of the Cambodian rubber sector

In 1910, the first rubber seeds were brought and planted in Cambodia in Veal Rinh district (Sihanoukville Province) by a Frenchman, Mr. Bouillard. After a couple of years of successful trial, the first rubber plantation was established over an area of 150 ha in 1914.

In 1921, large-‐scale rubber plantations were introduced by five colonial companies, mainly French, on the red soils of the Chup and Chamkar Leu plateau, in Kompong Cham province.

By 1940, rubber trees covered about 28,000 hectares of industrial-‐scale plantation estates across the high-‐potential red earths. There were six factories producing 20,000 metric tons of rubber annually.

From 1945 onwards, due to political instability and a shortage of qualified labor from Tonkin, the area’s cultivation and production struggled to maintain pre-‐war levels.

Between 1953 and 1970, the French companies expanded their cultivated areas by a half, while the Cambodian state created many plantations and encouraged the development of smallholders and private plantations. This developed mainly near industrial-‐scale concessions in the traditional red soil area of Kampong Cham province. By 1969, the areas cultivated with rubber reached 70,000 ha (of which almost 70 percent by agro-‐industrial companies and one-‐quarter by private and smallholders’ plantations). Production was 52,000 tons of rubber.

During the 1970s, Cambodia experienced a considerable devastation of its rubber plantations due to the Vietnam War and the subsequent takeover by the Khmer Rouge (1975-‐1979). The US army used chemical defoliant during the war between North Vietnam and the US-‐backed Government of South Vietnam along the Cambodian-‐Vietnamese border adjacent to the rubber growing areas. When Cambodia became under the control of the Khmer Rouge, foreign managers first retreated to Phnom Penh, which allowed exports to remain somewhat stable, but foreign companies left Cambodia when the Khmer Rouge took control of Phnom Penh in 1975. In the late 1970s, much of the land used for rubber cultivation was devastated and rubber production declined dramatically to as little as 10,000 tons per year.

Between 1979 and 1989, Cambodia was under Vietnamese occupation, and the Socialist regime began to revive the rubber plantations through nationalisation. Under the centralized economic regime, all rubber plantations were nationalized and placed under the direct supervision of the General Directorate of Rubber Plantations of MAFF. The sector also benefitted from technical assistance provided the Soviet Union and some European bloc countries. However, the rubber sector developed only slowly, as existing rubber trees were old (30-‐70 years) and the pace of replanting rubber trees was slow. From 1985, state-‐owned natural-‐rubber production companies gained increasing management autonomy.

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When the Vietnamese withdrew in 1989, Cambodia had to reorganize and progressively liberalised the rubber sector throughout the 1990s. Since the (unprofitable) estates were a drain on an already constrained state budget, divestment became a condition of IMF structural adjustment facilities (1993-‐1996) and was integral to ADB, World Bank and other donor agreements.

− Household-‐owned plantations -‐-‐or “smallholder rubber plantations”-‐-‐ started in 1990, and the area under smallholder plantation increased rapidly.

− In 1991, rubber plantations were organized into seven state-‐owned rubber estates (SORE), together with two private plantations and several smallholder rubber plantations. The Cambodia Rubber Research Institute (CRRI) was formed with the objective of upgrading rubber yield and production.

− In 1993, the Government released State-‐operated businesses to non-‐government owners including self-‐managed rubber plantation enterprises, rubber plantation associations, family-‐scale rubber plantations, and other divestment strategies.

− After 1993, the year of the national election run by the United Nations, managerial systems were improved, and new planting programs to replace the very old existing plantations were installed.

− In 1996, state-‐owned companies were transformed into economically driven Public Enterprises (PE), with broad management freedom.

− At the end of 1997 restructuring of the estate system started, with the establishment of Peam Cheang as a separate estate, the excising of land from Chup to form the Rubber Research Institute of Cambodia, and the privatization of Ta Pao and Rattanakiri plantations.

− In 1999 the seven estates were devolved into independently managed state-‐owned enterprises with ownership exercised through the State Property Agency (SPA) within the MEF. To compensate for the loss of budget revenue from the separation of the estates, the government introduced an export tax.

The private, non-‐industrialised plantations developed primarily due to liberalisation measures introduced at the end of the 1990s and early 2000s.

− In 2000, a first law authorised small planters to produce, process and sell their rubber freely: they remained however obliged to sell to State-‐owned companies. This situation kept producer prices relatively low, only leaving them the alternative of illegal trade of coagulam to Vietnamese traders who offered better prices.

− It was not until June 2005 that planters were permitted to sell their rubber to any buyer. A regulation of this date also authorised the construction of private collection points in district or provincial centres that had to be approved by the DGPH.

The private processing industry is a relatively new industry in Cambodia. A June 2003 order authorised private parties to process cup lump and coagulam sourced from smallholders, resulting in the development of private enterprises and a decrease in the sale of illegal exports of raw rubber.

In 2008 and 2009, the government privatised all seven previously state-‐owned rubber estates (SORE) -‐-‐Chup, Peam Cheang, Krek, Memut, Snuol, Chamkar Ondoung and Boeng Ket-‐-‐ in a bidding process involving local and international companies.

The government also provided economic land concessions (ELC) to domestic and foreign investors. In several cases however, ELCs led to social unrest, destruction of entire villages, and displacement of families who had lived there for decades but had no valid land titles.

Source: Adapted mainly from ADI (2007), AFD (2008), EIC (2007), CRDI (2009), Yem et al. (2011), Saing (2009), www.opendevelopmentcambodia.net/briefings/economic-‐land-‐concessions.


There are three categories of rubber growers in Cambodia: Private-‐owned plantations, economic land concession (ELC) companies, and smallholder rubber plantations.

− Private-‐owned plantations include the seven previously state-‐owned rubber estates (SORE) which were privatised in 2008 and 2009: Chup, Peam Cheang, Krek, Memut, Snuol, Chamkar Ondoung and Boeng Ket. The tapped area in private-‐owned plantations in 2011 was about 23,000 ha, and will in a few years more than double, as the area under maintenance (with immature trees) is more than 27,000 ha, leading to a total area of almost 51,000 ha (Table 4). Private-‐owned plantations produced almost 20,000 tons of rubber in 2011.

− Smallholder rubber plantations. Household-‐owned rubber plantations started in 1990, and have increased rapidly largely due to the government policy of providing parts of state-‐owned plantations to farmers employed by the government. The tapped area by smallholders in 2011 (22,000 ha) is almost half of Cambodia’s total tapped area. Most rubber smallholders have plantations of one or two plots, averaging 2.8 ha in size (Hing and Thun, 2009). According to GDR, there are more than 18,500 smallholder families in Cambodia, producing an estimated 25,000 tons of rubber.

− Economic land concession (ELC) companies. The government provided areas under 10,000 ha as economic land concessions to foreign and local investors to develop rubber and other industrial crops. The total area of ELC provided by the Royal Government for rubber investment is more than 450,000 hectares. ELCs are a difficult issue, as there are cases that have led to social unrest, destruction of entire villages, and displacement of families who had lived there for decades but had no valid land titles (Box 1). ELC companies have planted more than 65,000 ha as of 2011, but are not tapping yet, since the planted rubber trees are not mature yet.

Table 4. Area for Cambodia’s rubber plantation and for economic land concesions, and production of rubber, 2011

Type of plantation

Rubber plantation Area for economic land concessions

(ECLs)

Total rubber

production Tapping

(mature trees) Maintenance (Re-‐/planting)

Total area of plantation

Estates 23,176 27,538 50,715 76,157 19,969 Smallholders 21,986 73,944 95,930 0 25,000 ELC companies 0 66,459 66,459 377,149 0 Total 45,162 167,942 213,104 453,306 44,969

Source: MAFF (2011).

The statistics that are provided by the General Department of Rubber is not fully complete, making it difficult to obtain the full picture about Cambodia’s rubber cultivation and production over time. One MAFF official mentioned that Cambodia’s official rubber data must be considered incomplete until recently, in particular because of an insufficient coverage of smallholders. The GDR sees a better collection of statistics on smallholders as one of its priority areas (Box 12 on page 41).

In addition, it is not always clear how GDR arrives at its statistics. For example, the immature area for the smallholders (73,944 ha) is obtained by summing up all new plantings for each year since 2006, but for Estates (27,538 ha) this is done for the years since 2002, which his seems inconsistent. Why do GDR consider “immature” trees that were planted in Estates in 2002, i.e. 10 years ago, when it takes only about 5-‐7 years for the trees to mature? A new calculation that sums up new plantings for estates since 2006 would slightly reduce the figure to 24,040 ha.


Table 5. Year of planting and estimate for the immature rubber area, by type of plantation, 2011 Year of planting Smallholders Estates ELCs 1980-‐89 423 .. 0 1990 308 .. 0 1991 65 .. 0 1992 104 .. 0 1993 246 .. 0 1994 253 .. 0 1995 393 .. 0 1996 679 .. 0 1997 998 .. 0 1998 387 .. 0 1999 524 .. 0 2000 789 .. 0 2001 692 .. 0 2002 1,513 20 0 2003 3,100 339 0 2004 6,151 1,280 0 2005 5,360 1,861 0 2006 8,714 2,363 0 2007 15,727 3,049 2,376 2008 19,495 4,893 5,649 2009 12,891 4,160 14,826 2010 10,120 5,432 34,643 2011 6,996 4,143 8,965 Total 95,930 27,538 66,459 Sub-‐total since 2002 90,068 27,538 66,459 Sub-‐total since 2006 73,944 24,040 66,459

Source: Excel sheets provided by MAFF. The number in bold is reported in Table 4.


Cambodia’s rubber production by Province

Natural rubber is grown in several provinces in Cambodia, in particular in Kampong Cham. Kampong Cham is by far the most important Province for rubber, with more than 90,000 hectares under cultivation in 2011, of which 37,000 hectares of mature rubber trees that are tapped, followed by Ratanakiri, Kratie, and Kampong Thom (Table 6). These four provinces are also home of Cambodia’s traditional rubber estates, which are large, previously state-‐owned plantations. The importance of Kampong Cham Province is due to the geographic focus by French colonial rubber companies in the 1920s; its proximity to Vietnam enables easy Cambodian rubber exports into Vietnam (Dourng and Sok, 2005).

According to a survey among 24 Provincial Departments of Commerce, natural rubber is among the “Top Ten Products” in five Provinces: Kampong Cham, Kratie, Pailin, Ratanakiri and Stung Treng.

Table 6. Cambodia’s natural rubber area (in ha), by Province, broken down by maturity and type of plantation, 2011

Province Total By maturity By type of plantation

Tapping Immature Estates ELC companies Smallholders Kampong Cham 91,759 37,049 54,710 39,898 3,035 48,826 Ratanakiri 33,589 2,794 30,795 2,617 5,696 25,276 Kratie 27,696 2,550 25,146 4,365 17,181 6,150 Kampong Thom 19,653 2,641 17,012 3,036 14,040 2,578 Mondul Kiri 15,241 7 15,234 0 8,461 6,780 Steung Treng 9,453 0 9,453 0 8,146 1,307 Siem Reap 4,953 0 4,953 473 4,480 .. Preah Vihear 3,390 13 3,377 0 1,430 1,960 Battambang 1,247 29 1,218 0 0 1,247 Pailin 878 20 858 0 0 878 Koh Kong 414 0 414 0 0 414 Banteay Meanchey 330 0 330 0 0 330 Svay Rieng 326 0 326 326 0 .. Sihanouk Ville 150 60 90 0 0 150 Kampot 20 0 20 0 0 20 Pursat 15 0 15 0 0 15 Not attributed 3,991 0 3,991 0 3,991 0 Total 213,104 45,163 167,942 50,715 66,459 95,930

Source: MAFF Annual Report (2011), calculated from Annex 27. For a more detailed breakdown, see Annex Table 1.


International trade statistics for rubber

International trade statistics distinguish four types of rubber products depending on their processing steps. The Harmonized System (HS), which is an international trade nomenclature covering more than 5,000 product items at the most detailed level (6 digits), distinguishes four items of rubber products:

Natural rubber latex, whether or not pre-‐vulcanised (HS 400110). This item refers to products made from latex, which is the milky white sap of the Hevea brasiliensis tree. To stabilize the elastic properties of latex and to create a commercially acceptable product, many chemicals are added to the latex sap during the manufacturing process.

Natural rubber in smoked sheets (HS 400121). This is a type of crude natural rubber in the form of brown sheets obtained by coagulating latex with an acid, rolling it into sheets, and drying over open wood fires. These so-‐called “ribbed smoked sheets” (RSS) are the main raw material for natural rubber products. Ribbed smoked sheets are graded on the basis of visual assessments (RSS IX, RSS 1, RSS 2, RSS 3, RSS 4 and RSS 5). The grades have been described in the “Green Book” of the International Rubber Quality and Packing Conference.

Technically specified natural rubber (TSNR) (400122). This natural rubber is graded by technical properties, rather than on visual distinctions. TSNRs are divided into a number of grades, depending on the dirt content, ash content, volatile matter content, nitrogen content, plasticity, and colour. Based on the specifications by the International Standards Organisation (ISO) from 1964, Malaysia introduced the Standard Malaysian Rubber (SMR) scheme in 1965. Many countries introduced further national standards, including Vietnam (SVR) and Thailand (STR).

Natural rubber in other forms nes (400129). This concerns natural rubber that is “not elsewhere specified,” i.e. that is not part of the first three types. Cambodia exports mainly natural rubber in other forms (HS 400129) according to Cambodian statistics, while statistics from partner countries suggest on the contrary that they import from Cambodia mainly technically specified natural rubber (HS 400122).

Information about exports and imports for rubber can easily and freely be accessed. The International Trade Centre (ITC) of the United Nations provides trade statistics for some 200 countries. Users from developing countries can access ITC’s Trade Map portal (www.intracen.org/marketanalysis) free of charge.

There are however two problems that can be found for many countries, including for Cambodia.

− Some countries do not report official trade statistics to the United Nations, which compile trade data for all UN member countries. For these countries, so-‐called “mirror statistics” –those reported by their trade partners– have thus to be used instead as a second-‐best solution. Until recently, Cambodia was also in that situation, and Cambodia’s exports were estimated using import data from its trading partners. This is a problem especially when important trading partners do also not report data regularly or late, which for Cambodia is the case for example for Vietnam. Fortunately, the situation has changed and Trade Map now includes official Cambodian trade statistics –provided by the National Institute of Statistics– since 2001 (though this concerns only annual data, and not yet quarterly and monthly data).

− However, even official statistics may not be fully reliable, and underestimate exports when they do not take into account informal exports. This problem of informal exports –which are not recorded at the border and thus do not appear in the statistics— also applies to Cambodia.


The world market for natural rubber (HS 4001, which regroups the four rubber products) represented almost 8 million tons, or USD 24 billion in 2010. According to data from the ITC’s Trade Map, world exports for technically specified natural rubber (TSNR) is by far the main traded products, with world exports totalling more than 5 million tons, worth USD 16 billion (Table 7). Between 2006 and 2010, world trade of rubber products grew by 7% per year in value, and declined by -‐2% in volume. TSNR is not only the largest rubber product, but was also the most dynamic product, with exports growing by 15% per year in value between 2006 and 2010, and 5% in volume.

Table 7. World market for natural rubber products, 2010 Value (USD

1,000) Quantity exported

(tons)

Unit value (USD/ton)

Annual growth in value, 2006-‐

2010 (%)

Annual growth in quantity,

2006-‐2010 (%) Exports 4001 Natural rubber (NR) 23,964,960 7,764,219 3,087 7 -‐2 400110 NR latex 2,669,708 1,199,157 2,226 4 -‐2 400121 NR in smoked sheets 3,065,279 937,723 3,269 -‐4 -‐12 400122 TSNR 16,253,039 5,091,783 3,192 15 5 400129 NR in other forms 1,967,411 666,106 2,954 -‐11 -‐17 Imports 4001 Natural rubber (NR) 23,769,785 .. .. 7 -‐2 400110 NR latex 2,925,537 1,149,982 2,544 10 -‐2 400121 NR in smoked sheets 2,981,701 971,027 3,071 -‐1 -‐7 400122 TSNR 14,464,018 4,618,681 3,132 10 2 400129 NR in other forms 3,379,809 1,159,371 2,915 0 -‐7

Source: ITC’s Trade Map (retrieved in January 2012).

Main rubber exporters

The main exporters of natural rubber (HS 4001) are located in Southeast Asia, in particular Thailand and Indonesia. Thailand and Indonesia are the world’s largest exporter of natural rubber, each exporting USD 7 to 8 billion in 2010, and together account for more than 60% of world exports (Table 8). Other main exporters are Malaysia and Vietnam, followed by Cote d’Ivoire and Nigeria. The 11 ANRPC member countries accounted for more than 90% of world exports of natural rubber in 2010.

The situation however depends on the exported product. Table 8 shows that Thailand is the dominant exporter in three natural rubber products: natural rubber latex (world market share of 71%), natural rubber in smoked sheets (75%), and natural rubber in other forms (32%). In contrast, Indonesia is by far the world’s largest exporter of technically specified natural rubber (TSNR), which is the largest and most dynamic exported rubber product. Indonesia’s 2.3 million tons of exports of TSNR are worth more than USD 7 billion, and correspond to about one third of all exported rubber products (HS 4001) in the world.

Cambodia is a small but quite dynamic player in the world rubber market. With exports of USD 83 million in 2010, Cambodia was the 19th largest exporter of natural rubber (HS 4001). Cambodia’s exports of natural rubber (HS 4001) grew more than twice as fast than world exports: 17% per year between 2006 and 2010, compared to 7% for the world. Cambodia rubber exports are almost exclusively made up of natural rubber in other forms (HS 400129), for which the country is the 6th largest exporter in the world.


Table 8. Top exporters of natural rubber products, 2010 Value

exported (USD 1,000)

Share in world

exports (%)

Trade balance (USD

1,000)

Quantity exported

(tons)


Annual growth in

value, 2006-‐2010 (%)


2006-‐2010 (%)

4001 Natural rubber World 23,964,960 100.0 195,175 7,764,219 3,087 7 -‐2 1. Thailand # 7,896,026 32.9 7,877,510 2,733,607 2,889 5 -‐3 2. Indonesia # 7,329,058 30.6 7,291,051 2,352,776 3,115 7 -‐1 3. Malaysia # 2,863,578 11.9 1,065,434 900,922 3,178 0 -‐8 4. Viet Nam* # 1,294,488 5.4 1,131,675 433,715 2,985 12 2 5. Côte d'Ivoire 680,427 2.8 667,170 240,729 2,827 16 8 6. Nigeria 555,298 2.3 553,188 119,054 4,664 98 144 7. Singapore # 396,358 1.7 16,294 122,989 3,223 -‐6 -‐16 (…) 19. Cambodia # 82,696 0.3 82,641 27,031 3,059 17 11 400110 Natural rubber latex, whether or not prevulcanised World 2,669,708 100.0 -‐255,829 1,199,157 2,226 4 -‐2 1. Thailand # 1,881,938 70.5 1,874,750 898,454 2,095 8 0 2. Malaysia # 168,474 6.3 -‐809,900 47,773 3,527 0 -‐8 3. Viet Nam* # 143,391 5.4 129,420 63,698 2,251 2 -‐8 4. Belgium 73,699 2.8 -‐24,186 24,093 3,059 -‐14 -‐18 5. Guatemala 72,760 2.7 72,750 34,338 2,119 11 2 6. Liberia* 53,977 2.0 53,877 22,507 2,398 -‐22 -‐15 7. Indonesia # 31,194 1.2 1,275 12,929 2,413 19 11 (…) 32. Cambodia # 1,262 0.0 1,260 400 3,155 .. .. 400121 Natural rubber in smoked sheets World 3,065,279 100.0 83,578 937,723 3,269 -‐4 -‐12 1. Thailand # 2,309,905 75.4 2,299,679 692,356 3,336 0 -‐8 2. Indonesia # 192,546 6.3 191,406 60,166 3,200 -‐32 -‐37 3. Myanmar* 122,142 4.0 121,747 40,566 3,011 33 20 4. Singapore # 118,435 3.9 12,490 34,064 3,477 -‐13 -‐19 5. Viet Nam* # 85,666 2.8 62,110 33,383 2,566 0 -‐3 6. Sri Lanka # 66,976 2.2 39,237 20,914 3,202 14 4 7. China # 51,592 1.7 -‐642,292 16,161 3,192 75 63 (…) Cambodia # 0 0.0 .. 0 .. .. .. 400122 Technically specified natural rubber (TSNR) World 16,253,039 100.0 1,789,021 5,091,783 3,192 15 5 1. Indonesia # 7,102,864 43.7 7,096,382 2,278,820 3,117 10 2 2. Thailand # 3,066,444 18.9 3,066,015 930,495 3,295 122 102 3. Malaysia # 2,647,356 16.3 2,155,573 838,522 3,157 -‐1 -‐8 4. Viet Nam* # 835,677 5.1 813,601 262,103 3,188 18 10 5. Nigeria 545,968 3.4 544,681 116,200 4,699 99 219 6. Côte d'Ivoire 470,885 2.9 470,584 165,813 2,840 18 11 7. Singapore # 276,456 1.7 6,095 88,697 3,117 -‐2 -‐14 (…) 60. Cambodia # 138 0.0 123 63 2,190 .. .. 400129 Natural rubber in other forms nes World 1,967,411 100.0 -‐1,412,398 666,106 2,954 -‐11 -‐17 1. Thailand # 637,360 32.4 636,705 211,978 3,007 -‐27 -‐31 2. Netherlands 262,828 13.4 115,015 80,068 3,283 267 259 3. Viet Nam* # 229,444 11.7 126,249 74,371 3,085 9 -‐5 4. Côte d'Ivoire 202,962 10.3 190,011 72,888 2,785 12 5 5. Germany 130,474 6.6 -‐254,998 43,509 2,999 78 74 6. Cambodia # 81,296 4.1 81,259 26,568 3,060 17 10 7. Sri Lanka # 79,822 4.1 79,687 23,439 3,406 9 1

Source: ITC’s Trade Map (retrieved in January 2012). * Countries with mirror statistics. # Members of The Association of Natural Rubber Producing Countries (ANRPC).


Cambodian rubber exports and main markets

It is now possible to easily access information about Cambodia’s exports and imports, after years of difficulties. The International Trade Centre (ITC) of the United Nations provides trade statistics for some 200 countries, which users from developing countries can obtain free of charge at ITC’s Trade Map portal (www.intracen.org/marketanalysis). Until recently however, Cambodia did not regularly report its trade statistics to the United Nations, which compile trade data for all UN member countries. As a result, so-‐called “mirror statistics” -‐-‐those reported by Cambodia’s trade partners – had to be used instead as a second-‐best solution. This was a problem since some of Cambodia’s trading partners do not report at all (e.g. Lao PDR) or only late (e.g. Vietnam), making it impossible to estimate bilateral trade between non-‐reporters. Fortunately, the situation has changed and Trade Map now includes official Cambodian trade statistics since 2001. It should be mentioned though that for the moment available Cambodian statistics are annual data. For the future, it would be useful to also report quarterly and monthly data to the United Nations.

There seem to be also substantial data discrepancies between the General Directorate of Rubber Plantations and the Customs and Excise Department (Saing, 2009).

Even official Cambodian statistics may not be fully reliable, and underestimate exports when they do not take into account informal exports. Informal exports are not recorded at the border and thus do not appear in the trade statistics. It is thus useful to compare national statistics and mirror data, even if they can differ for many other reasons as well (Table 9).

− This comparison should however not be done for 2010, as mirror data for 2010 are significantly underestimated, as they do not include Vietnam (an important trading partner for Cambodia) which has not yet reported 2010 data.

− For 2009 and all other years, Cambodian export data for natural rubber (HS 4001) are significantly lower than mirror data. For example, official exports in 2009 were 32,000 tons, compared to 53,000 tons for mirror data.

− An analysis at product level also reveals strong differences between Cambodian statistics and mirror statistics. Cambodia exports mainly natural rubber in other forms (HS 400129) according to Cambodian statistics, while mirror statistics suggest on the contrary that it exports mainly technically specified natural rubber (HS 400122).

Table 9. Cambodia’s exports of rubber: Cambodian versus mirror statistics (USD 1,000) Value (USD 1,000) Quantity (tons)

2006 2007 2008 2009 2010* 2006 2007 2008 2009 2010* 4001 Natural rubber Cambodian statistics 43,124 40,684 31,122 48,635 82,696 23,292 20,359 11,881 31,469 27,031 Mirror data 94,272 105,913 91,828 92,447 72,065 50,088 53,520 37,350 53,293 22,171

400110 Natural rubber latex Cambodian statistics 3 0 0 0 1,262 1 0 0 0 400 Mirror data 0 0 254 0 0 0 0 125 0 0 400121 Natural rubber in smoked sheets Cambodian statistics 0 0 0 0 0 0 0 0 0 0 Mirror data 482 144 1,074 1,185 1,423 224 80 414 681 454 400122 Technically specified natural rubber (TSNR) Cambodian statistics 0 0 0 0 138 0 0 0 0 63 Mirror data 91,556 102,518 85,651 90,934 67,452 47,540 50,786 34,271 52,390 20,455 400129 Natural rubber in other forms Cambodian statistics 43,122 40,684 31,122 48,615 81,296 23,292 20,359 11,881 30,969 26,568 Mirror data 2,233 3,251 4,851 328 3,192 2,326 2,654 2,540 222 1,262

Source: ITC’s Trade Map (retrieved in January 2012). * Mirror data for 2010 are significantly underestimated as they do not include Vietnam, which reports late its trade statistics to the United Nations.


Cambodia’s natural rubber is exported to only a few market destinations, mainly Viet Nam, Malaysia, Singapore, China, Thailand, and the Republic of Korea. The order and magnitude of trade with partners depend once again on whether Cambodian statistics or mirror statistics are used (Table 10).

The Vietnamese market has long been the leading export destination for Cambodian natural rubber. Saing (2009), partly referring to Tasker (2003), mentions several reasons for this:

− Most Cambodian rubber estates are located close to the Cambodia-‐Viet Nam border.

− Vietnamese traders accept low-‐grade natural rubber from Cambodia for reprocessing and re-‐exporting.

− Although prices in the Vietnamese market are generally lower than those in Malaysia and Singapore, domestic producers tend to choose Vietnamese buyers as the price difference in the two markets is normally lower than the cost of transportation and handling to the point of sale (Phnom Penh or Sihanoukville) for non-‐Vietnamese sales.

Table 10. Cambodia’s exports of natural rubber (HS 4001), by market (tons) Cambodian statistics Mirror statistics

2006 2007 2008 2009 2010 2006-‐2010

2006 2007 2008 2009 2010* 2006-‐2010*

World* 23,292 20,359 11,881 31,469 27,031 114,032 50,088 53,520 37,350 53,293 22,171* 216,422* Viet Nam 19,374 17,582 9,844 24,618 19,617 91,035 38,814 38,438 28,723 42,955 .. 148,930 Malaysia 1,382 1,098 883 1,276 2,394 7,033 3,565 7,524 2,605 3,408 4,799 21,901 Singapore 2,483 1,391 950 1,184 613 6,621 0 0 0 0 0 0 China 0 0 50 2,374 2,041 4,465 5,746 6,442 4,977 4,983 12,322 34,470 Thailand 0 192 0 248 977 1,417 0 0 0 168 0 168 Rep. of Korea 53 0 0 805 498 1,356 96 19 538 1,697 3,648 5,998 Hong Kong, China 0 0 0 943 0 943 0 0 0 0 0 0 Chinese Taipei 0 0 0 0 313 313 217 78 258 0 557 1,110 Belarus 0 0 0 0 242 242 0 0 0 0 346 346 India 0 0 0 0 121 121 0 0 0 0 230 230 Switzerland 0 0 0 0 100 100 0 0 0 0 0 0 United States 0 0 96 20 0 116 1,286 768 0 20 96 2,170 Indonesia 0 0 0 0 58 58 0 0 0 0 0 0 Germany 0 0 58 0 0 58 38 0 58 0 0 96 South Africa 0 0 0 0 58 58 0 0 0 0 0 0 France 0 38 0 0 0 38 0 0 0 0 0 0 Italy 0 38 0 0 0 38 0 0 38 62 19 119 Spain 0 19 0 0 0 19 192 230 59 0 154 635 Japan 0 0 0 0 0 0 0 0 40 0 0 40 Belgium 0 0 0 0 0 0 0 0 38 0 0 38 Canada 0 0 0 0 0 0 38 0 0 0 0 38 Argentina 0 0 0 0 0 0 0 0 16 0 0 16 Czech Republic 0 0 0 0 0 0 77 0 0 0 0 77 Portugal 0 0 0 0 0 0 19 0 0 0 0 19 Russian Federation 0 0 0 0 0 0 0 21 0 0 0 21 Number of markets 4 7 6 8 12 18 11 8 11 7 9 19

Source: ITC’s Trade Map (retrieved in January 2012). For information on individual rubber products, see Annex Table 2. * Mirror data for the world in 2010 and the sum 2006-‐2010 are significantly underestimated as they do not include Vietnam, which is a significant importer of Cambodian rubber but has not yet reported its trade statistics to the United Nations for 2010.


Main importers

China, the United States and Japan are the world’s three largest importers of natural rubber (HS 4001). China’s natural rubber imports represented more than USD 5,5 billion in 2010, corresponding to a world market share of 24% (Table 11). China’s imports are roughly of the same size than the combined imports of the United States (world market share of 12.6%) and Japan (10.2%), and are much more dynamic. China’s rubber imports grew on average by 12% per year between 2006 and 2010, compared to 7% for the world and only 1 to 2% for the United States and Japan. Malaysia is another dynamic natural rubber importer, though it remains a net exporter. Malaysia’s rubber imports grew by more than 30% per year between 2006 and 2010, making it the world’s fourth largest importer. In contrast, Cambodia’s natural rubber imports are negligible (USD 55,000 or 70 tons in 2010).

The situation differs somewhat depending on the imported product (Table 11).

− Technically specified natural rubber (HS 400122) is by far the most traded natural rubber product, with world imports accounting for almost USD 15 billion. The main destination markets are China (30% world market share), the United States (17%) and Japan (12%).

− These three countries are also the main importers for natural rubber in smoked sheets (HS 400121): China (23%), Japan (19%), and the United States (11%). With an average import growth of 29% per year between 2006 and 2010, India has become the world’s forth-‐largest importer of natural rubber in smoked sheets.

− For natural rubber latex (HS 400110), two countries account for more than half of world imports: Malaysia (33% world market share) and China (18%). Other important importers are the Netherlands, whose imports doubles every year between 2006 and 2010, and Iran.

− For natural rubber in other forms (HS 400129), Brazil is the main destination market (world market share of 14%), followed by Germany (11%) and Chinese Taipei (9%).


Table 11. Top importers of natural rubber products, 2010 Value

imported (USD 1,000)

Share in world

exports (%)

Trade balance

(USD 1,000)

Quantity exported

(tons)


Annual growth in

value, 2006-‐2010 (%)


2006-‐2010 (%)

4001 Natural rubber World 23,769,785 100.0 195,175 0 .. 7 -‐2 1. China # 5,666,651 23.8 -‐5,586,595 1,861,367 3,044 12 3 2. United States 2,987,237 12.6 -‐2,837,661 944,969 3,161 2 -‐5 3. Japan 2,422,907 10.2 -‐2,420,943 758,097 3,196 1 -‐6 4. Malaysia # 1,798,144 7.6 1,065,434 678,882 2,649 32 7 5. Germany 1,261,441 5.3 -‐952,181 407,896 3,093 8 1 6. Rep. of Korea 1,194,794 5.0 -‐1,182,673 402,000 2,972 7 0 7. Brazil 790,467 3.3 -‐760,924 260,805 3,031 9 3 (…) 128. Cambodia # 55 0.0 82,641 70 786 -‐25 -‐23 400110 Natural rubber latex, whether or not prevulcanised World 2,925,537 100.0 -‐255,829 1,149,982 2,544 10 -‐2 1. Malaysia # 978,374 33.4 -‐809,900 348,486 2,807 30 1 2. China # 526,158 18.0 -‐524,092 251,235 2,094 11 2 3. Netherlands 136,241 4.7 -‐133,511 42,423 3,211 101 71 4. Iran 109,873 3.8 -‐109,873 38,121 2,882 16 6 5. United States 103,719 3.5 -‐81,393 53,222 1,949 -‐14 -‐7 6. Germany 99,422 3.4 -‐83,861 40,107 2,479 -‐16 -‐18 7. Belgium 97,885 3.3 -‐24,186 36,433 2,687 -‐9 -‐14 (…) 132. Cambodia # 2 0.0 1,260 12 167 -‐56 -‐36 400121 Natural rubber in smoked sheets World 2,981,701 100.0 83,578 971,027 3,071 -‐1 -‐7 1. China # 693,884 23.3 -‐642,292 217,084 3,196 3 -‐4 2. Japan 570,130 19.1 -‐570,079 172,978 3,296 -‐6 -‐14 3. United States 340,295 11.4 -‐329,311 97,295 3,498 -‐5 -‐12 4. India # 227,717 7.6 -‐214,480 125,553 1,814 29 34 5. Brazil 152,839 5.1 -‐151,717 45,829 3,335 4 -‐3 6. Malaysia # 121,692 4.1 -‐86,137 39,452 3,085 7 -‐3 7. Singapore # 105,945 3.6 12,490 31,408 3,373 -‐11 -‐17 (…) Cambodia # 0 0.0 .. 0 .. .. .. 400122 Technically specified natural rubber (TSNR) World 14,464,018 100.0 1,789,021 4,618,681 3,132 10 2 1. China # 4,333,787 30.0 -‐4,312,017 1,353,189 3,203 14 6 2. United States 2,507,980 17.3 -‐2,434,608 783,406 3,201 6 -‐3 3. Japan 1,706,926 11.8 -‐1,706,629 542,126 3,149 10 1 4. Rep. of Korea 1,006,243 7.0 -‐995,693 332,338 3,028 8 1 5. Germany 716,279 5.0 -‐554,611 230,837 3,103 32 23 6. Malaysia # 491,783 3.4 2,155,573 158,087 3,111 57 45 7. France 353,299 2.4 -‐245,177 111,574 3,166 3 -‐4 (…) 108. Cambodia # 15 0.0 123 0 .. -‐6 .. 400129 Natural rubber in other forms nes World 3,379,809 100.0 -‐1,412,398 1,159,371 2,915 0 -‐7 1. Brazil 485,360 14.4 -‐456,951 155,935 3,113 6 -‐1 2. Germany 385,472 11.4 -‐254,998 119,198 3,234 2 -‐5 3. Chinese Taipei 308,831 9.1 -‐302,792 93,836 3,291 11 2 4. Malaysia # 204,500 6.1 -‐192,433 132,144 1,548 21 3 5. Spain 188,190 5.6 -‐185,012 60,668 3,102 0 -‐7 6. Czech Republic 185,499 5.5 -‐185,107 57,456 3,229 1 -‐5 7. Slovakia 156,885 4.6 -‐156,882 49,108 3,195 11 3 (…) 103. Cambodia # 37 0.0 81,259 57 649 -‐13 -‐20

Source: ITC’s Trade Map (retrieved in January 2012. * Countries with mirror statistics. # Members of The Association of Natural Rubber Producing Countries (ANRPC).


Cambodia’s place in world rubber production, exports and imports

The summary Table 12 indicates the top ten producers, exporters and importers of natural rubber in the world, as well as for Cambodia, together with their share in the world total.

Table 12. World’s largest producers, exporters and importers of natural rubber (HS 4001), 2010 (share in world total, %)

29 producers 110 exporters 184 importers 1. Thailand # (29.0) 1. Thailand # (32.9) 1. China # (23.8) 2. Indonesia # (26.5) 2. Indonesia # (30.6) 2. United States (12.6) 3. Malaysia # (8.2) 3. Malaysia # (11.9) 3. Japan (10.2)

4. India # (8.1) 4. Viet Nam* # (5.4) 4. Malaysia # (7.6) 5. Viet Nam # (7.2) 5. Côte d'Ivoire (2.8) 5. Germany (5.3)

6. China # (6.6) 6. Nigeria (2.3) 6. Rep. of Korea (5.0) 7. Philippines # (3.8) 7. Singapore # (1.7) 7. Brazil (3.3)

8. Brazil (2.1) 8. Germany (1.3) 8. France (2.4) 9. Côte d'Ivoire (2) 9. Luxembourg (1.2) 9. Spain (2.4)

10. Nigeria (1.4) 10. Netherlands (1.1) 10. India # (2.3) (…) (…) (…)

16. Cambodia # (0.4) 19. Cambodia # (0.3) 128. Cambodia # (0.0)

Source: FAO, ITC’s Trade Map. * Countries with mirror statistics. # Members of ANRPC. For more detailed information, see Annex Table 3 and Annex Table 4.

Prices

The world market price for natural rubber has strongly fluctuated since the mid-‐2000s, which makes investment decisions difficult, as rubber trees yield latex only at least five years after planting. There are several sources of information concerning prices for natural rubber products, in particular the World Bank and the Association of Natural Rubber Producing Countries (ANRPC).

− The World Bank monitors major commodity markets that are important to developing countries. It publishes monthly world prices since 1960 for over 70 commodities, including rubber (RSS3 and TRS20). The world market price for natural rubber has strongly fluctuated since the mid-‐2000s, with strong increases followed by rapid declines in prices. For example, the Singapore/Malaysia rubber price (RSS3 grade) increased by a factor of five in less than five years from 0.5 USD/kg in December 2001 to 2.7 USD/kg in June 2006, then dropped within less than six months to 1.6 USD/kg in November 2006, increased to 3.2 USD/kg in June 2008, declined by more than 60% to 1.2 USD/kg in less than six months (December 2008), then increased more than five times in about two years to a historic high of more than 6.2 USD/kg in February 2011 (Figure 5). The historic highs are due to a combination of weather-‐related supply disruptions in South-‐East Asia, strong demand for tires from emerging markets, and high oil prices (natural rubber competes with synthetic rubber, which is a by-‐product of crude oil), according to the World Bank’s Global Economic Prospects June 2011. Since then, rubber prices have come down again to 3.5 to 4 USD/kg.

− The Association of Natural Rubber Producing Countries (ANRPC) publishes weekly (as well as daily) prices for different types of rubber and markets: TSR (Kuala Lumpur, Bangkok), RSS (Bangkok, Singapore, Colombo, and Kottayam), and Latex (Malaysia). The data are free of charge, but available only since January 2009. Figure 6 shows that the prices for technically specified rubber (e.g. TSR Kuala Lumpur) and ribbed smoked sheets (e.g. RSS Bangkok) are quite close. Latex (Malaysia) prices tend to be lower, but show a similar pattern over time as TSR and RSS.

The strong price variation is a challenge for rubber producers, in particular smallholders. For rubber producers, the strong fluctuation of prices makes investment decisions difficult, rubber trees yield latex only at least five years after planting. In addition, smallholders have less information than traders and are price takers, and are thus particularly vulnerable to price fluctuations and disadvantaged in price negotiations.


Figure 5. Monthly prices of Singapore/Malaysia (RSS3 grade) natural rubber (USD/100kg), January 2000 to February 2012

Source: World Bank (www.worldbank.org/prospects/commodities). Rubber RSS3 grade, Singapore Commodity Exchange Ltd (SICOM) nearby contract beginning 2004; during 2000 to 2003, Singapore RSS1; previously Malaysia RSS1.

Figure 6. Weekly average prices of natural rubber (USD/100kg), January 2009 to February 2012

Source: ANRPC (www.anrpc.org/html/weekly_average_prices.aspx). RSS Bangkok (RSS3): FOB physical price reported by Rubber Research Institute of Thailand. TSR Kuala Lumpur (SMR 20): FOB physical price at 5.00 p.m. quoted by buyers. Latex Malaysia (Latex 60%): Average of farm-‐gate prices in North, Central and South Malaysia for dry rubber content.

49#

270#

162#

322#

120#

395#

327#

626#

337#

400#

0#

100#

200#

300#

400#

500#

600#

700#

2000#

2001#

2002#

2003#

2004#

2005#

2006#

2007#

2008#

2009#

2010#

2011#

2012#

0"

100"

200"

300"

400"

500"

600"

700"

3"Jan."09"

14"Feb."09"

28"Mar."09"

95May509"

205Jun509"

01"Aug."09"

12"Sep."09"

24"Oct."09"

5"Dec."09"

16"Jan."10"

27"Feb."10"

105Apr510"

225May510"

35Jul510"

145Aug510"

25"Sept."10"

"6"Nov"10"

185Dec510"

295Jan511"

12"Mac"11"

305Apr511"

115Jun511"

235Jul511"

35Sep511"

155Oct511"

265Nov511"

75Jan512"

185Feb512"

"RSS"Bangkok"(RSS3)"

"TSR"Kuala"Lumpur"(SMR20)"

"Latex"Malaysia"(Latex"60%)"


Cambodia’s rubber value chain: Main actors, activities, and constraints

Main activities and actors in Cambodia’s natural rubber value chain

The main activities along Cambodia’s value chain in natural rubber range from input provision, cultivation of rubber, collection, processing, and distribution to domestic and international markets (Figure 7).

The main actors are rubber producers, collectors and traders, processors, and distributors, including exporters (Figure 7).

Box 2 provides a short glossary of the main terms used in the rubber industry.

Figure 7. Main activities and actors in Cambodia’s rubber sector

Activities Provision of:

• Seedlings • Fertilizer • Pesticides (Herbicides, Insecticides, Fungicides)

• Machinery / tools and equipment

• Preparation of land • Nursery and selection of seedlings

• Planting • (Intercropping) • Maintenance (Fertilizing, weeding, applying pesticides)

• Tapping • (Drying) • (Storage) • (Transportation)

• Collection • Quality assessment • (Drying) • Storage • Transportation

• Transforming latex to coagulated dry rubber (done at farm level)

• Transforming latex or coagulated dry rubber into ribbed smoked sheets (RSS) or technically specified rubber (TSNR)

• Packaging and labeling

• Storage

• Distribution • Exporting

Actors • Local input providers

• Agro-‐industrial companies and CRRI (for seedlings)

• Business associations / cooperatives

• Small-‐and medium-‐scale scale farmers

• Large-‐scale producers (agro-‐industrial companies)

• Local collectors • Large local and Vietnamese traders

• Processors in agro-‐industrial companies

• Private small-‐scale processors

• Agro-‐industrial companies

• Business associations / cooperatives

Source: Compiled by Value Chain Unit.

Box 2. Glossary of rubber terms

Coagulation: Irreversible agglomeration of particles originally dispersed in a rubber latex.

Concentrated Latex: Latex, the rubber content of which has been greatly increased by evaporation, creaming, filteration, or centrifuging.

Crepe Rubber: Rough-‐surfaced sheet rubber produced by passing coagulum through a series of rollers which rotate at different speeds.

Crumb Rubber: Technically specified particulate rubber formed by mechanical granulation or by the addition of crumbling agents to coagulum.

Cup Lump: Lump of rubber (coagulated field latex) remaining in the tapping cup after emptying out the latex.

Dry Rubber Content (DRC): Mass of rubber coagulated by acid from one hundred parts mass of latex.

Dry Rubber: Rubber obtained from field latex by acid coagulation, washing, sheeting or crumbling, and drying.

Field Coagula: Low grade coagulated rubber retrieved from the field; includes cup lump, tree lace, scrap from the base of the tree, and pre-‐coagulated rubber strained from the latex.

Field Latex: Latex obtained on tapping the Hevea tree.

Input supply Culovaoon Collecoon / trading Processing

Distribuoon / Exporong


Latex: Aqueous colloidal emulsion of rubber (natural or synthetic) or of certain plastics. Generally refers to the emulsion obtained from a tree or plant or produced by emulsion polymerization.

Raw Rubber: Uncompounded rubber. Rubber to which no ingredients have been added.

Sheet Rubber: Sheets of milled coagulum dried in air-‐drying tunnels (Air Dried Sheet) or cured in smoke houses (Smoked Sheet).

Tapping: The operation of making a carefully-‐controlled incision in the bark of the Hevea tree to permit the latex to flow out.

Technically Specified Rubber (TSR): Rubber which is graded according to a series of rigorous technical properties, e.g., dirt retention, plasticity retention, viscosity.

Tree lace: Strips of dried rubber formed on the tapping panel of the rubber tree after latex collection.

Source: Adapted from www.therubbereconomist.com/The_Rubber_Economist/Glossary_of_rubber_terms.html and www.diptechsystems.com/glossary.htm.

Cultivation

Main actors in cultivating natural rubber There are three categories of rubber growers in Cambodia (AFD, 2008):

− Private-‐owned plantations, including the seven previously state-‐owned and now privatised plantations (agro-‐industries);

− Economic land concession (ELC) companies; and

− Smallholder rubber plantations.

The number of smallholder rubber plantations in Cambodia increased strongly after the government decided to offer parts of state plantations to rubber farmers employed in the government (CDRI, 2009).

The size of plantations of smallholders range strongly, from 2 hectares to more than 50 hectares, and in some cases even 100 hectares (ADI, 2007). ADI (2007) distinguishes several types of smallholder rubber plantations (Box 3).

Box 3. Types of smallholder rubber plantations

1. Those that grow rubber on their own land off the estates. These can be tending trees that they or their family have planted themselves, including trees newly planted in the 1990s as well as old trees planted before 1970, or trees originally planted by the estates. They can be on areas always occupied by smallholders, previously owned by their family, or others, or on areas previously on the estates by now formally separated from them;

2. Those that occupy areas designated for smallholder production on the estates, and are supported by the estate with planting material, technical advice, and the purchase of latex. On some estates, notably Snoul, these smallholders also provide a reservoir of labor during peak periods. The land remains part of the concession area and part of the estate, and is reported as such. It includes newly planted and unexploited areas, and older trees from the early 1990s and before 1970;

3. Those that have taken over rubber trees on the estates, usually through settlement by encroachment. The land remains within the concession area of the estates, but is essentially outside direct management control, although estate management may still provide support with planting and the purchase of latex. Large areas in this category were cleared of trees in the 1990s (particularly when prices were very low), both to realize income from timber and to plant other crops for both subsistence and sale; and

4. Those that have occupied areas designated for development on the estates, but which remain undeveloped by the estate usually for reasons of cost, access, or agronomy. These smallholders often plant foodcrops but also have planted their own rubber trees. The area remains part of the concession, but is essentially no longer under estate management. The estate may purchase the latex but most of the rubber is only recently planted and is immature..

Source: ADI (2007).


Main steps in cultivating rubber in Cambodia Cultivation includes all the steps that are necessary to cultivate natural rubber (preparation of land, planting, etc.) and to harvest it (i.e. tapping). The Rubber Board of the Ministry of Commerce and Industry in India (http://rubberboard.org.in/rubbercultivation.asp) provides detailed information about the steps in cultivating rubber.

Preparation of land

Rubber plants grow on many types of soil, provided the soils are deep (surface soil of at least 1 meter), moderately to slightly acidic (pH 5.0–6.8), and well drained. Flat lands (as in e.g. Kampong Cham) are easy for working, but rubber is also grown on hilly lands (e.g. in Ratanakiri). Rubber has been successfully established in degraded deforested areas, leading to improved land use and a reduction of erosion, siltation (deposition of fine mineral particles –silt– on the bottom of stream and river beds and lakes) and flooding. For best growth and productivity, rubber requires warm humid climate with temperatures ranging from 20°C to 35°C. and a fairly distributed rainfall throughout the year (Box 4).

Rubber plantations, with a life expectancy of nearly 40 years, assume that farmers have secure access to land (AFD, 2008).

The main steps of preparing the land include clearing (including possible light burning after felling and drying to ensure the destruction of light brushwood and branches of trees, though excessive cleaning and brushing causes loss of humus in the soil), layout (typically square or rectangular planting), terracing (in hilly land), drainage (for low lying land), and pitting and refilling (see Chandy).

The cost of labour for digging the holes is about USD 70 per hectare, according to interviewed farmers.

Box 4. Climatic conditions for optimum growth of rubber trees

The following shows the main climatic conditions for optimum growth of rubber trees:

− Rainfall of 2,000 to 3,000 mm, evenly distributed without any marked dry season and with 125 to 150 rainy days per year.

− Maximum temperature of 29 to 34 degrees C and minimum of about 20 degrees C, with a monthly mean of 25 to 28 degrees C.

− High atmospheric humidity of the order of 80%.

− Bright sunshine, amounting to about 2,000 hours per annum at the rate of 6 hours per day through all the months.

− Absence of strong winds.

Source: Rubber Board, India Ministry of Commerce and Industry (http://rubberboard.org.in/rubbercultivation.asp).

Nursery and selection of seedlings

There are several rubber varieties in Cambodia, in particular GT 1 and PB 260. GT 1 was introduced long time ago in Cambodia, it is easy to graft and tap with generally low susceptibility to disease, and gives highly satisfactory production (EIC, 2007). An AFD project recently introduced two other clones: PB 260 and RRIM 600. PB 260 has a higher potential yield than GT 1, but requires a very high standard of tapping. RRIM 600 has also a high but unbalanced yield.

While the larger estates have their own nurseries to propagate seedlings for their own use, smallholder farmers have to buy seedlings from small private nurseries (DAI et al., 2008). Interviewed farmers mentioned that the cost per seedling is about 3,200 Riel, corresponding to about USD 450 per ha (of 555 trees). Hing and Thun (2009) estimate that about half of rubber smallholders buy seedlings from companies, while the other half cannot afford to do so and thus depend on using a mixture of different seeds collected from other farms, which costs less but provides a lower yield.

DAI et al. (2008) estimate that the rapid expansion of the rubber sector in Cambodia leads to a significant under production of seedlings and newer estates are constrained in their ability to expand production in the short term.


Planting

Rubber is planted in rows, 5 to 6 meters apart from each other. Planting of rubber is done by hand, placing a seedling in a hole, typically from early of March to June. Most of Cambodia’s rubber planters plant about 555 trees/ha, which is the suggested standard by GDR.

The cost of labour for planting is about USD 55 per hectare, according to interviewed farmers.

Intercropping

The economic life of a rubber tree can be divided into two: six to seven years in the immature stage and twenty to thirty years in the productive stage, depending on weather and soil conditions. Until the rubber trees become productive and are tapped, financial returns mainly come from intercropping with other cash crops or renting the land to other farmers for that purpose (CDRI, 2009). In the first three to four years, when rubber trees have few leaves and the canopy is still open, allowing sunlight to penetrate, farmers can plant short-‐term crops between the trees. Hing and Thun (2009) report that in some cases rubber farmers allow villagers to grow crops, at a cost of land rent of around USD 50 per hectare and year. They have only oral agreements that usually depend on trust, mutual interest and sympathy of plantation owners for poor landless families. Although revenue from non-‐rubber cultivation is small, it helps offset ongoing expenditures. Also, when food prices increased, more people used young rubber land to grow cash crops.

It appears that cassava is the main crop for intercropping on rubber land in Cambodia, despite its negative effects on rubber yield. EIC (2007) suggest soybean and mungbean as suitable crops to grow between the first and third year. However, the crop most commonly grown on rubber land in 2007 was cassava, and was expected to happen again in 2008 due to the good prospects for cassava (Hing and Thun, 2009). In contrast, an AFD project strongly advised against intercropping cassava on rubber land, because it consumes large quantities of nutrients and water, and is a carrier of the radicular disease induced by Phomès sp (AFD, 2008). Several farmers did not follow that advice during the AFD project: They succumbed to the prospect of higher revenue and planted cassava, resulting in a delay of the growth of their rubber plants by almost one year (AFD, 2008).

The crops that can be used for intercropping depend on the maturity of the rubber trees. Some food crops are used for subsistence needs, while others can be marketed. Anwar (2011) from the Indonesian Rubber Research Institute reports that the following crops are useful intercropping with rubber, as they have no negative effect on rubber growth and production:

− Rubber trees less than 3 years old (the canopy is still open, and light intensity higher than 80%): o Food crops for subsistence needs: Rice and maize (and soybean and cow pea). o Horticulture crops as marketable crops: Banana, pineapple, watermelon and chilli.

− Rubber trees more than 3 years old (when the canopy starts closing): o Spice plants: Cardamom, curcuma, turmeric and ginger. o Tube plants: Amorphophallus onchophyllus or iles-‐iles. o Perennial plants: Coffee rubusta, gambier, pepper, noni fruit and salak or zalacca (a

species of palm trees yielding snake fruit).

Maintenance (Fertilizing, weeding, applying pesticides)

There are several steps involved in the maintenance of rubber trees.

− Pruning must be done regularly to develop a smooth trunk without branches or large scars on the stem/trunk along the optimum height of 2.5-‐3 meters from the ground (www.pinoybisnes.com/agri-‐business/rubber-‐production-‐guide).

− Weeding can be done manually or with the use of chemicals (herbicides). Weeds in rubber areas must be controlled or minimized to prevent stunted growth of the rubber trees and to prevent fires during the dry season (www.pinoybisnes.com/agri-‐business/rubber-‐production-‐guide. In Cambodia, weeding is done manually 7 to 10 times per year.


− Fertilizing. Rubber plants need complete nutrition for best growth, in particular during the first three years. Ideally, fertilizer application should be based on the results of soil and plant tissue analysis (“discriminatory fertiliser usage”) to ensure adequate supply of nutrients and maintenance of proper balance in the ratio of nitrogen (N), phosphorus (P) and potassium (K). In Cambodia, rubber planters apply on average 0.2 kg of chemical fertilizers per plant, two times per year (corresponding to more than 200 kg/ha). The cost of one 50 kg bag of chemical fertilizer costs around USD 35 (or about USD 150 per hectare). Discriminatory fertiliser usage can also improve the quality of latex by preventing pre-‐coagulation of field latex and reduce instability of preserved latex that occur mainly due to high magnesium content or improper ratio of magnesium and phosphorus (http://rubberboard.org.in/rubbercultivation.asp).

− Applying pesticides. Pests (diseases, insects and physical disorder) can reduce influence the yield of rubber trees. There are different rubber pests (see e.g. http://rubberboard.org.in/ManageCultivation.asp?Id=123 and http://rubberdisease.blogspot.com).

Tapping

Tapping starts in the fifth to seventh year after planting and continues for 25 to 30 years. The first tapping can provide around 900 kg/ha (dry rubber), and production increases over time to up to 1,500 kg/ha. Older trees yield more latex, but production decreases significantly from the age of about 25-‐30 years.

Rubber yield is influenced by many factors, including soil fertility, variety planted, age of the trees, the weather, and practices for maintenance and tapping (Box 5), rendering simple comparisons of yield across countries difficult to interpret.

Box 5. Influence of weather and temperature on the latex concentration and yield of rubber trees

Weather in the plantation changes every two to three months, affecting the trees’ latex concentration and yield. When there is little rainfall, the bark is hard and holds only a small amount of water. This results in a high concentration of latex, which slows down the flow. When there is more rain, the bark becomes soft and the concentration of latex decreases, the latex flows longer and thus yields increase. When the rain subsides and cold winds arrive, the latex coagulates more slowly, causing it to flow longer.

At the end of the rainy season, the soil starts to dry and the rubber leaves start to shed, causing more sunlight to reach the ground and the temperature in the plantation to rise. Such weather conditions cause latex to flow more slowly and thus reduce the yield.

The temperature affects the yields because latex does not flow when temperature is high. In high temperature regions, low concentration trees are less affected than high concentration trees. Workers should tap in early morning, when the soil is cool, to obtain more latex. In general, trees can produce more latex in regions where there is a long cold season and short dry season.

Source: Hing and Thun (2009).

Cambodia’s yields for natural rubber appear low when compared to larger rubber-‐producing countries. According to FAO statistics, the yield of pepper is Cambodia (1,050 kg/ha) is somewhat lower than the world average (1,140 kg/ha) and that of the main rubber producing countries, including Cambodia’s neighbours Thailand (1,580 kg/ha) and Vietnam (1,720 kg/ha (Table 13).

However, there seem to be problems with FAO data when compared to ANRPC data, as FAO yields appear unreasonably low for Malaysia and too high for the Philippines (Table 14). According to these data, which should be more reliable than FAO data since they are validated by rubbers experts, rubber trees produce 1,150 kg/ha of latex per year in Cambodia, which is lower than yield in Thailand (1,700kg/ha) and Malaysia (1,500kg/ha), and somewhat higher than in Indonesia (1,000kg/ha).

Cambodia’s current yields are also low when put in a historic context. Natural rubber yields in Cambodia were higher in the 1960s (more than 1,400 kg/ha) than they are today, i.e. half a century later.


Table 13. Yields among the main natural rubber producers in the world, 2010 Production

(1,000 tons) Yield

(tons/ha) Change of yield

(Index 2000=100) 1. Thailand # 3,052 1.58 102 2. Indonesia # 2,788 0.91 145 3. Malaysia # 859 0.67 93 4. India # 851 1.89 120 5. Viet Nam # 754 1.72 137 6. China # 691 1.01 88 7. Philippines # 395 2.86 325 8. Brazil 222 1.79 192 9. Côte d'Ivoire 215 1.59 85 10. Nigeria 143 0.42 128 (…) 16. Cambodia # 38 1.05 85 World 10,537 1.14 120

Source: FAO, FAOSTAT. # Members of the Association of Natural Rubber Producing Countries (ANRPC).

Table 14. Average Annual Yield (kg per hectare of tapped area) Year Thailand Indonesia Malaysia (2) India Vietnam China Philippines Sri Lanka Cambodia 2003 1,796 765 1,280 1,654 1,363 1,296 983 1,067 1,207 2004 1,800 839 1,300 1,689 1,393 1,268 1,094 1,057 1,092 2005 1,736 862 1,320 1,727 1,441 1,082 1,108 1,145 979 2006 1,800 967 1,370 1,879 1,558 1,128 1,274 1,128 1,086 2007 1,723 993 1,420 1,767 1,603 1,168 1,567 1,247 1,112 2008 1,698 994 1,430 1,903 1,654 1,053 1,581 1,382 1,181 2009 1,704 901 1,450 1,760 1,717 1,187 1,574 1,437 982 2010 (1) .. 1,029 1,480 1,771 1,685 1,143 1,695 1,490 1,100 2011 (1) .. .. 1,500 1,813 1,733 1,162 1,688 .. 1,150

(1) Annual data for 2010 & 2011 are anticipated figures reported by respective governments on December 16, 2010. (2) Malaysia’s data do not account rubber forests in Sabah and Sarawak States. A large extent of untapped mature area in the country is not accounted in the estimation of average yield. .. Indicates non-‐availability of official data with the government concerned. Source: ANRPC Natural Rubber Trends & Statistics, Volume 2 No. 12 December 2010.

The main equipment for tapping is bowls or cups, a few large containers of 30 litres and special knives or chisels, used to incise the bark so as to open the resin canals without damaging the cambium (Hing and Thun, 2009). Tapping is carried out orthogonally to the latex vessels and the sap is collected in small buckets or plastic bags. There is a new method of latex stimulation and extraction that involves the stimulation of latex with ethylene gas (Box 6).

Harvesting season is from April to January (because the leaves of the tree die and fall off in February and March). The rubber trees are tapped in the early morning because latex does not flow when the temperature is high, and the latex is collected in the afternoon. There is no tapping when there is heavy rain.

Most of those employed for tapping are paid monthly and only a few paid daily. In addition to their pay, hired workers can also collect rubber left over in the cups (Hing and Thun, 2009). In Cambodia, a tapper can tap around 370-‐400 trees/day and gets paid about 400,000 Riel (about USD 100)/month. Normally, a tapper is responsible for 3 rows of rubber trees (about 350-‐400 trees/row).

Box 6. Hypodermic Latex Extraction (HLE): Boosting Rubber Tree Yields with Ethylene

HLE is a new and "physiologically efficient" method of latex stimulation and extraction that involves the stimulation of latex and rubber formation in rubber trees (Hevea brasiliensis) with ethylene gas. The patented technique has many benefits compared to conventional tapping systems, including:

− Increase in commercial yields to 3,500 to 5,000 kg/ha/year compared to present commercial yields of about 1,500 to 2,000 kg/ha/year by the conventional (non-‐ethylene stimulated) systems of tapping and stimulation.

− Extraction of latex at a reduced frequency and an increase in task size for different HLE operations such as stimulation (about 1300+ trees/day), tapping / latex extraction (650 trees/day) and collection (650 trees/day), which together results in a reduction in labour requirement and hence, in labour cost.


− Negligible or significantly less bark consumption that is expected to result in better health of the tree, better girth increment and longer economic life of the tree (through better source to sink translocation of photosynthates).

− The problem of rain wash is reduced / eliminated by this method.

− Latex can be collected with the use of any anticoagulant inside the collection container (normally 5-‐10ml of 20% ammonia solution is adequate).

Source: www.arabis.org/documentation/man/hle_guideline.html.

Drying and storage

After taping, some farmers dry the latex before selling it to collectors. According to Hing and Thun (2009, rubber farmers that are close to a processing factory can sell their product in the form of latex, while those far from the factory convert latex into a solid form (coagulum) before selling. These farmers pour latex into a hole in the ground and typically keep it for up to 10 to 15 days before selling it to collectors (although the dried latex could be stored much longer, even a year or more).

Transportation

Usually, farmers sell rubber latex or coagulum at their farm to local collectors in the village or commune. There are however some cases where the farmers themselves transport their product to the buyers, in general larger traders. Interviewed farmers in Ratanakiri also sell and transport their product to Kampong Cham, in particular if they have contracts or if prices are higher.

Cutting of old trees

When the rubber trees become unproductive after about 30 years, they are cut and usually replaced with new seedlings. One hectare yields 100-‐200 m3 of rubber wood by the age of 25-‐35 years (Yem, 2011).

In Cambodia, rubber wood is simply transformed into semi-‐processed products, i.e. cu into logs. EIC (2007) reported that there were seven local private companies buying rubber wood and converting this wood material into semi-‐processed products. Rubber wood is typically not transformed into finished products (such as furniture), mainly due to lack of skilled workers, low technology and difficulties in finding buyers (EIC, 2007). The semi-‐processed products are often sold to Vietnam or China where they are transformed into finished products.

Constraints in cultivating rubber in Cambodia The following are the main constraints and possible solutions mentioned by planters, both small-‐scale and large-‐scale, during field trips to Kampong Cham and Ratanakiri in 2012 (Table 15). It should be mentioned that some of the issues, such as access to finance, are not specific to the rubber sector but rather “cross-‐cutting” —as they affect farmers in many other agricultural sectors as well— so their solution should also be cross-‐cutting.

Table 15. Main constraints for cultivating rubber

Constraint Main constraints

Knowledge / Management

Although they often do not acknowledge so, many small-‐scale farmers have limited knowledge about best practices concerning: -‐ cultivation techniques (e.g. how to select appropriate seedlings, fertilizers, pesticides, etc.), -‐ intercropping (to obtain income during the phase when rubber trees are not productive), and -‐ post-‐harvesting (e.g. how to protect latex liquid from rainfall, and transform it into dry rubber), which can lead to low yield and quality. Many farmers however do not consider this as serious: If they need technical assistance, they observe what is done in agro-‐industrial plantations or seek advice from friends or relatives working in the agro-‐industrial sector.

Material inputs Lack of domestic supporting industries for inputs (such as fertilizers, pesticides, tools and bowls for tapping) leads to limited access to quality inputs (e.g. possibility of diluted or inappropriate pesticides), high costs for imported inputs, and ineffective use of e.g. pesticides.



Lack of adoption of new varieties due to insufficient availability of high performance and certified plant material in the market, which is often sold without guarantee. No monitoring system to identify the quality (and thus future yield) of the purchased varieties.

Land Unsecure land tenure, especially for small farmers, as these often do not possess legal titles to testify that they own their chamcar (farm).

Labour Farmers have problems finding enough labour (in particular for tapping).

Labour is often inexperienced and easily leaves if they get better paid elsewhere. A shortage of skilled tapers is considered a serious problem and could result in significant losses due to untapped blocks. Use of unskilled tapers results in damage to the cambium and high bark consumption rates. These cause poor bark renewal. When poorly renewed bark is tapped, there is a decline in yield.

Technology Underdeveloped scientific and technological capacity, which translates into outmoded rubber seeding and tapping techniques, lack of adoption of new varieties and insufficient knowledge of the optimum conditions for rubber planting. Plants are often not adequately treated when they suffer from diseases (e.g. mould, fungi). Farmers lack testing tools to measure the latex content (and thus depend on the tests done by buyers) that determines sales prices.

Post-‐harvesting Limit knowledge on how to protect the latex liquid from rainfall, and transform latex liquid into dry rubber (though rubber planters learn from each other).

Finance Unfavourable credit conditions (high interest rates, limited loan scale, complicated and long credit procedures, strict collateral requirements) prevent especially small farmers from taking credit (they fear losing their land because of collateral requirements) and thus from buying quality inputs and investing in upgrading or expansion. This problem is compounded by the fact that rubber has a high potential income but also high risk: it needs relatively high and long term investment, income begins only five to seven years after planting, and is uncertain because of strong price fluctuations. Farmers are sometimes paid only after a delay of a few days.

Infrastructure Limited agricultural research, extension services and training concerning appropriate inputs, cultivation and post-‐harvesting techniques. Some argue that research and extension activities are more efficient and effective with the involvement of the private sector.

High cost of logistics (transportation, fuel) reduces not only farmers’ revenues and limits the number of potential buyers, but more generally increases transaction and export costs along the entire value chain.

Technical standards, quality

Farmers typically dry the latex rather than selling it in liquid form (because they can store, aggregate and sell when it is convenient for them), which means that processors cannot use it for first quality rubber (CRS 5).

Marketing and distribution channels

Farmers do not have access to sufficient price and market information; even they often do not acknowledge so. In particular small farmers are price takers, and thus particularly vulnerable to price fluctuations. Price information is scare, and often comes from buyers that have an interest in low prices. In addition, limited knowledge about alternative buyers and low negotiation power compared to buyers (collectors, traders) can further push down the sales price.

Business enabling environment

Especially large plantations face the problem of theft of latex. Coagulum is the product most open to the risk of theft, estimated at between 5 and 15 percent of the production by one study.

The informal cost of investment is potentially high. Even though Cambodia is open to trade and foreign direct investment, some businesses have in the past reported of unfair competitors who engage in activities of corruption or tax evasion, or take advantage of Cambodia’s poorly enforced regulations.

Source: Compiled by Value Chain Unit, based on literature review (EIC, 2007; CDRI, 2009; Hing and Thun, 2009) and interviews with farmers and other stakeholders.


Collecting and trading

Main actors in collecting rubber products Collectors and traders play an important role in facilitating the flow of natural rubber from the farmgate to the processing factories. Significant players from farm to export are shown in Figure 8. Small collectors buy latex from farmers and sell it to wholesalers or factories in their areas. Some traders remain owners of the rubber but pay the factory for processing (for cost price plus a 15 percent margin) (ADI, 2007). However, some collectors buy rubber for sale to Vietnam, although this is illegal (Hing and Thun, 2009). The traders sell processed rubber mainly to Vietnamese buyers at the border even though the sales are negotiated in Cambodia and only the delivery is made at the border (ADI, 2007).

The establishment of formal collecting points in district and provincial centers since June 2005 has intensified rubber-‐trading activities (Saing, 2009). ADI (2007) distinguished three types of natural rubber collectors (Box 8):

− Small-‐scale collectors who visit smallholders and buy cup lump and coagulum at the farmgate;

− Formal sub-‐agents of private processors with designated private collection points; and

− Informal sub-‐agents of processors acting as unofficial private collection points.

Most of the large old private-‐owned plantations have their own processing factories. They process their own latex and purchase smallholder latex either directly or through intermediary collectors. The previously state-‐owned and now privatised plantations almost exclusively process liquid latex and generally decline to purchase coagulum from outside sources. Cup lump and tree lace is also not purchased from smallholders as this would only encourage illegal collection of these products from within the estate plantations (ADI, 2007).

Smallholders and small private plantations rarely deliver directly to the factory, producing coagulum or cup lump to various levels of moisture content and selling them to collectors; either at the farm gate or to collection points in the district towns (ADI, 2007).

Rubber smallholders have little choice but to sell their collected latex to private companies for processing and export, given that only semi-‐processed (dry) rubber, not latex, is allowed to be exported (Hing and Thun, 2009).

Competition amongst collectors is high, and there are usually several options for farmers to choose from, according to ADI (2007), though interviews with collectors in Kampong Cham and Ratanakiri did not confirm this. The price of the coagulum is based on quality, which is related to the water content. Payment is usually on the dry rubber content (DRC). Traders prefer to buy older coagulum since the water content is lower (the price offered for older rubber is higher than that for young rubber because of the moisture content). Usually purchases of rubber from smallholders is done at the spot market rate as sellers can visit several collection points on any given day and receive the best price. Several collectors do offer long-‐term contracts but the risk of default is usually too great (ADI, 2007).

Box 7. Smallholders: Selling liquid latex or coagulum?

Most of the large processors prefer to buy latex rather than coagulum, and offer a premium for it.

In contrast, smallholders prefer to sell coagulum. It slows the oxidation of the rubber, providing both longer and easier handling characteristics, and hence aiding transportation and widening marketing options. The latex coagulates naturally but slowly and quality is preserved by the addition of acid, later removed by the application of ammonia.

However, smallholders are known to adulterate their latex with all kinds of additives, rendering it unusable for higher grades of rubber. Such additives include water, which can be extracted but temporarily adds to volume and weight, as well as soil or cassava starch, which speeds coagulation but is more difficult to extract.

Source: ADI (2007).


Figure 8. Flow chart of rubber products in Cambodia

Source: Hing and Thun (2009).

Box 8. Three types of collectors of rubber products

ADI (2007) identifies three types of collectors of rubber products:

− Type 1. Small-‐scale collectors who visit the smallholder and purchase cup lump, tree lace and coagulum at the farm gate. Type 1 small-‐scale collectors visit farmers and collect on a weekly basis; usually purchasing 100 kg at a time (enough for one motorbike load). These collectors are popular as farmers can receive cash-‐in-‐hand and do not have to pay the expense of transporting their rubber into town. As an alternative, smallholders can choose to transport their own rubber into town and usually combine such trips with a shopping expedition or other errands; using the money from the sale of the rubber to fund their expenses.

− Type 2. Collectors who act as sub-‐agents of private processors and have designated private collection points in district and provincial centers. Type 2 collectors are sub-‐agents of private processors who are licensed by DGPH to create private collection points. These are licensed on a yearly basis and have designated collection points (usually the collectors’ own house or place of business).

− Type 3. Collectors who are not formal sub-‐agents of processors and are acting as unofficial private collection points in district and provincial centers. Type 3 collectors may act as middlemen, buying unprocessed rubber from smallholders and selling it to processors, or they may continue to own the rubber and process it at private processors on a fee-‐for-‐service basis. Currently the processing fee is between USD 95-‐100 per ton. Both types 2 and 3 may be advance funded by processors and are obligated to deliver a set quantity of rubber to the processor over a given period.

Source: ADI (2007).

Three mains forms of rubber being collected

There are three mains forms of rubber being collected: latex, cup lump, and coagulated rubber. Rubber in the form of coagulum is not exportable, even though it was at one time, towards processing centres in Vietnam at the beginning of the 1990s. There are many different ways of processing latex collected at the plantation before delivery to the factory (Box 9).

Box 9. The best-‐known methods of processing latex collected at the plantation before delivery to the factory

The following are the best-‐known methods of processing latex collected at the plantation before delivery to the factory:

− The latex is kept in ammonia to preserve the bacterial coagulation or self-‐coagulation then transported to the factory. It is a collection method used by large and medium-‐sized plantations, but also by smallholders operating near a good road or at the edge of large plantations. The latex is used for production of off-‐latex TSR grades or concentrated latex produced by centrifuging or creaming.

− The latex is allowed to coagulate naturally in the collecting cup or coagulation is induced by addition of acid to form coagulum slabs. It is delivered to traders then sold on to the factory for the production of mainly TSR 10 and TSR 20.

− The latex is diluted to 20-‐25 percent, coagulated using formic or sulphuric acid in tanks, then laminated on a multi-‐roller calender or manual rolling mill for making USS sheets drained then air-‐dried, before being smoked as RSS sheets.


− The field coagula (slabs and cup lumps) are coagulated by the addition of acid at the pre-‐processing centre and then crushed between the two rollers of a minicrepe machine. After several passes, bands of crepe called blanket are produced. These are cut up and then mixed in a granulator with fragments of field coagula during the processing operation.

− The production of coagulum is the simplest process to work. It is also the one which brings the least added value for smallholders owing to the difficulty of correctly determining the DRC and the risks of accidental or deliberate contamination. Furthermore the coagulum is the product most open to the risk of theft, which exists in Cambodia as it does for all industrial-‐scale plantations. These coagulum thefts can be estimated at between 5 and 15 percent of the production. Rubber in the form of coagulum is not exportable, even though it was at one time, towards processing centres in Vietnam at the beginning of the 1990s.

− The production of export quality USS or RSS as for RSS3 requires only a small investment. Vietnamese producers have been equipped with centrifuged latex lines for almost a decade and the demand for RSS 3 sheets remains strong among tire manufacturers (Michelin, Bridgestone), and this quality grade is suitable for smallholder production.

− Production of an intermediate crepe requires a more substantial investment and a grouping together of smallholders or private plantations. This is an intermediary process which has been used at pilot scale in Indonesia and Thailand. It has not yet undergone any real development. However, it is a process that guarantees the TSR factory operator a more consistent quality, a plasticity retention index (PRI) for rubber better than that obtained from coagulum, a low contamination level entails processing costs 30 to 40 percent lower compared with standard TSR 20 processing. The process is better adapted for long-‐distance transport of village rubber produced by smallholders on difficult roads compared with ordinary field coagula (slabs and cup lumps).

Source: SOFRECO and CEDAC (2005), taken from ADI (2007).

Constraints in collecting rubber in Cambodia The following provide the main constraints mentioned by traders during field trips to Kampong Cham and Ratanakiri in 2012 (Table 16).

Table 16. Main constraints for collecting / trading rubber



-‐-‐-‐

Material inputs -‐-‐-‐

Labour -‐-‐-‐

Technology -‐-‐-‐

Access to finance Lack of working capital, high credit costs and absence of credit on the basis of crops as collateral (warehouse receipt inventory finance system) limits investment in upgrading or expansion.

Infrastructure High transportation costs (weak infrastructure, cost of fuel).


Some small smallholders adulterate their latex with all kinds of additives, rendering it unusable for higher grades of rubber.


The market is small and localised (even if some collectors from Ratanakiri sell their products in Kampong Cham).


Competition among collectors seems limited and localised, resulting in possible price collusions among the collectors (so farmers are quoted the same prices by the collectors).

Source: Compiled by Value Chain Unit, based on literature review and interviews with collectors and traders.


Processing

Main actors in collecting rubber products Traditionally, processing natural rubber in Cambodia was mainly done by the public sector (former state-‐owned rubber plantations). The seven state-‐run rubber plantations, all of which have been privatized since early 2009, have their own rubber-‐processing plants (Table 17).

The private processing industry is relatively new (around 2003). The increasing number of private plantations and smallholders, as well as strong world rubber demand and consumption provide incentives for the private sector to establish rubber-‐processing plants (Saing, 2009). However, there are no clear statistics on the number of processing factories in the sector. Saing (2009) cite a study (Khun and others, 2008) that suggests that the number of private processing plants had increased from one in 2004 to 17 in late 2006.

The production capacity of Cambodia’s rubber processing factories varies strongly (Saing, 2009). A 2005 study suggested that the potential production capacity in Cambodia was approximately 100,000 tons per year (Table 17). EIC (2007) estimated that the rubber processors operate at 50 to 80 percent of their capacity because of the insufficient supply of rubber, related to recent replanting on agro-‐industrial scale plantation estates.

A more detailed analysis provides an interesting pattern: a significant over-‐capacity for processing latex goes along with a strong under-‐capacity for processing of cup lump and coagulum, particularly from the smallholder sector (EIC, 2007; ADI, 2007).

Table 17. Capacity of rubber processing factories, 2004 Factory Drier

(tons/hour)

Capacity (tons/day)

Days of operation

Potential annual capacity

Chup 3-‐4 100 250 25,000 Krek 2 28 267 7,476 Memot 2 28 267 7,476 Snuol 2 28 267 7,476 Chamkar Andong 2 28 267 7,476 Boeng Ket 1.5-‐2.5 35 267 9,345 Tapao 2 28 267 7,476 Labansiek/ Ranatakiri (now: Swift) 3.5 21 267 5,607 Peam Chang 1 14 250 3,500 TTY 2 28 267 7,476 Krek (private) 2 28 267 7,476 Other workshops (estimated) 1 18 267 4,806 Total capacity .. 384 .. 100,590


Main steps in processing rubber There are no domestic supporting industries for rubber processing in Cambodia, so most inputs for processing natural rubber have to be imported. This is true for coagulation chemicals such as formic or sulphuric acid (Vietnam), capital equipment such as processing lines (Malaysia, Vietnam), and laboratory equipment for testing and certification of rubber (variety of suppliers, including United Kingdom) (DAI et al., 2008).

The rubber processing industry in Cambodia is limited to semi-‐processed products (dry rubber, see Box 10), which are exported to other countries in the region, especially Vietnam, where they are further transformed into final products.

Box 10. Primary processing: How to transform liquid latex into block or crumb rubber

Primary processing is relatively straightforward, turning liquid latex into block or crumb rubber, a form of crude rubber now standard in most major producing countries:

− The latex gathered by the tappers is strained and diluted with water, usually in the plantation.


− At the factory, the suspension is mixed with acid to cause the rubber particles within the latex to clump together, a process that takes several hours and, because the acid baths are long and narrow, forms the rubber into strips.

− These are then pressed to remove the liquid and consolidate the rubber before a form of shredding to create loose clumps.

− After passing through a hot-‐air dryer, the rubber is compressed into 30kg blocks or biscuits, wrapped in polythene and then packed in wooden crates of 1,200kg net (1,300kg gross).

Source: ADI (2007).

As mentioned earlier, Cambodia processes (and exports) mainly “Natural rubber in other forms” (HS 400129) according to Cambodian statistics, while statistics from partner countries suggest on the contrary that they mainly import from Cambodia “technically specified natural rubber” or TSNR (HS 400122). TSNR is graded by technical properties, rather than on visual distinctions, and divided into a number of grades, depending on the dirt content, ash content, volatile matter content, nitrogen content, plasticity, and colour. Figure 9 shows the main types of natural rubber: sheet rubber, crepe rubber, and TSNR. There are several advantages of TSNR over the conventional sheet and crepe grades of rubbers (Box 11).

Figure 9. Types of natural rubber

Source: UNCTAD, http://unctad.org/infocomm/anglais/rubber/characteristics.htm.

Box 11. Advantages of TSNR over the conventional sheet and crepe grades of rubbers

Since it is available in a limited number of well-‐defined grades, correct choice of grades according to requirements by the consumers is rather easy.

Since it is possible to assess the actual content of foreign and volatile matter, mistakes can be avoided in deciding the actual worth of the material.

Since it is marketed as compact, polyethylene wrapped bales, degradation of the rubber on storage, handling and transportation can be reduced.

Since sizes have been standardized and the bales are compact, considerable savings can be made in transport through mechanized handling and containerization.

Source: www.tis-‐gdv.de/tis_e/ware/kautschuk/naturkautschuk/naturkautschuk.htm.

Cambodian rubber is classified according to the Cambodia Standard Rubber (CSR). In the past, the lack of certification by an internationally recognized, accredited laboratory prevented Cambodian rubber from having broad market access (EIC, 2007). Many counties, including the United States, the European Union, Japan, Thailand, India and China, require certification by international accredited laboratories. The National Specific Laboratory House (NSLH) in the Cambodia Rubber Research Institute (CRRI) established a national certification laboratory to test and certify crumb rubber as Cambodian Specified Rubber (CSR) as per international standards. The NSLH received the certificate of ISO/IEC 17025:2005 on rubber quality control in June 2011.

ADI (2007) suggested that Cambodia’s rubber production is not well adapted to world demand. The grades of processed rubber are related to the type of product delivered to the factory for processing (Table 18).

Natural'rubber'

Latex'concentrates'

Dry/solid'rubber'

Conven7onal'rubber'

Sheet'rubber'(mostly'ribbed'

smoked'sheets'RSS)'

Crepe'rubber'

New'rubber'Technically'specified'rubber'(typically'in'

bloc'form)'


− Cambodia greatest production is CSR 5L -‐-‐5 percent or less impurity or Total Solid Content (TSL)-‐-‐, which can only be produced3 with latex (Table 18). It is used for light-‐coloured articles such as elastic bands, teats for babies’ bottles, bottle stoppers and sports shoes. However, this market is limited and competition is fierce, more favourable to countries that have good marketing practices and are already well established on these markets (ADI, 2007).

− The global demand for natural rubber comes mainly from the tire industry, where high-‐grade (high priced) rubber is not required: tire manufacturers only require CSR10, CSR20 or RSS3. However, these products, which use cup lump or coagulum (Table 18), only represent 10 percent of Cambodian rubber (ADI, 2007).

This mis-‐match between Cambodian production and world demand may be related to the above-‐mentioned over-‐capacity in Cambodia for processing latex and an under-‐capacity for processing of cup lump and coagulum, particularly from the smallholder sector.

In addition, while manufacturers often have requirements for rubbers with specific characteristics, ADI (2007), referring to older studies (Tasker 2003; SOFRECO and CEDAC 2005), suggests that Cambodian rubber meets only general specifications and is usually sold on the spot market as a filler for shortfalls in longer term contracts.

Table 18. Quality of technically specified rubber (TSR) by collection type

TSR quality Latex Cup lump Coagulum, USS, Tree lace, Soil rubber

TSR 3 or 5 Yes No No

TSR L Yes No No

TSR 10 Yes Yes Yes

TSR 20 No Yes Yes

TSR CV Yes Yes Yes

RSS quality Yes No Yes with USS

Centrifuged latex Yes No No

Creamed latex Yes No No



Constraints in processing rubber in Cambodia The following provide the main constraints mentioned by processors during field trips to Kampong Cham and Ratanakiri in 2012 (Table 19).

Table 19. Main constraints for processing rubber



-‐-‐-‐

Material inputs There are no domestic supporting industries for rubber processing, so most inputs for processing have to be imported. The factories operate only at 50-‐80 percent of their capacity because of the insufficient supply of rubber, related to recent replanting on agro-‐industrial scale plantation estates.

Labour Lack of high skilled workers and professional staffs.

Technology Production (and exports) concern mainly semi-‐processed products (dry rubber).

The ability to transform dry natural rubber into finished products that can be used domestically and internationally is still limited due to lack of investment, technology and a skilled labor force.

Access to finance -‐-‐-‐

Infrastructure High energy costs (than e.g. in Vietnam), especially those linked to generator-‐produced electricity, lead to higher operating cost in Cambodia than in neighbouring countries.


Most processors lack knowledge about fumigation on rubber products before export.


Cambodia’s rubber production is not well adapted to world demand. It produces mainly products processed from latex (for which world demand is small and competition fierce and for which Cambodia has an over-‐capacity in processing) and few products from cup lump or coagulum (for which world demand is very large and Cambodia has an under-‐capacity in processing). Cambodian rubber meets only general specifications and is usually sold on the spot market as a filler for shortfalls in longer term contracts.


-‐-‐-‐

Source: Compiled by Value Chain Unit, based on literature review and interviews with collectors and traders.

Exporting

Main actors in exporting natural rubber Concerning the export side, the main exporters are processing companies, who sell on their own account typically to brokers in Singapore or Malaysia, in the case of foreign affiliates, to their mother companies, which are often located in Vietnam and China. According to Hing and Thun (2009), large Cambodian companies exported rubber to China or Malaysia through Vietnam, while small companies sell rubber to Vietnamese companies for export to China.

The main buyers in Vietnam (which are nearby and take on the complexities of selling to far-‐away export markets) are (ADI, 2007):

− Vietnamese merchants buy products to re-‐export them;

− Malaysian, Singaporean and Chinese buyers for the export markets;

− Vietnamese buyers who send on products for processing in Vietnam; especially low quality rubber which needs to be remixed.


Main channels for exporting rubber in Cambodia There are three main channels for the export of palletized crumb rubber (ADI, 2007):

− through Vietnam via road to Saigon Port,

− through Phnom Penh Port, or

− through Sihanoukville Port.

Exports via Saigon Port are the preferred export channel of Cambodian rubber exporters. Though Saigon Port is not the cheapest option, it has a number of advantages, including the proximity to Kampong Cham (by far the largest rubber producing province), the size of the port, the fact to be served by larger ships and connected to more export destinations, and its straightforward procedures and quick methods of payment (Table 20).

According to ADI (2007), the cost of shipping from Kampong Cham through Vietnam is cheaper (USD 40/ton) than through Sihanoukville (USD 62/ton), and Sihanoukville cannot compete, even more so when the main export markets for Cambodian rubber are in China, rather than Singapore or Malaysia. Hing and Thun (2009), referring to a study by Kakada et al. (2008), report that hidden costs of natural rubber exports through Sihanoukville and the Vietnamese border represent about 5 percent of the total f.o.b. value.

ADI (2007), referring to Tasker (2003), note that the majority of estate sales are to Vietnamese buyers rather than Singapore or Malaysian sales. It is generally accepted that Vietnamese prices are below that of other buyers but the difference is more than compensated for by differences in transport and handling costs to point of sale (either Phnom Penh or Sihanoukville in the case of non-‐Vietnamese sales).

Table 20. Main channels for the export of palletized crumb rubber from Kampong Cham

Via Saigon Port (Vietnam) Via Phnom Penh Port Via Sihanoukville Port

Route (2 legs)

1. Kampong Cham -‐ Vietnam border

2. Vietnam border -‐ Saigon Port

1. Kampong Cham -‐ Phnom Penh

2. Phnom Penh -‐ Saigon Port

1. Kampong Cham -‐ Phnom Penh

2. Phnom Penh -‐ Sihanoukville

Preferred route by exporters

Preferred export route (though more expensive, USD 34/ton).

Not used by exporters (though cheaper, USD 28/ton).

About same price (USD 34/ton) as Saigon Port.

Proximity (from production-‐area to port) and transport costs

Proximity (nearer to the main production areas than Sihanoukville or Phnom Penh port).

Lowest production-‐area to port transport costs.

The first leg (Kampong Cham to Phnom Penh) is by truck, never containerised and often not on pallets.

Cost are around USD 6/ton plus an additional USD 6/ton of hidden expenses

On reaching Phnom Penh port, pallets of crumb rubber need to be reloaded into containers, incurring additional handling fees.

The second leg (Phnom Penh to Sihanoukville) can be undertaken by road (6 to 7 hours) or rail (12 hours, with an irregular timetable).

Road costs are USD 22 per ton, including customs clearance and loading on ship.

Containerized rubber is 30 percent more expensive than the merchandise bulk-‐loaded on trucks.

Road transport costs 30 percent more than rail. In both cases, the rubber has to be re-‐loaded into containers if these must be used.

Port characteristics (loading operations) and

Saigon Port is much bigger than Sihanoukville, served by larger ships, has more connections (mainly to Singapore and Hong Kong but also beyond), is more efficient, and does

Restrictions on the draft of barges that can arrive at Phnom Penh Port, because of fluctuating levels of the river: 1,500 tonnes or less (dry

Sihanoukville port is only one-‐tenth of the size of Saigon port., translating into higher transport costs than from Saigon Port.


Via Saigon Port (Vietnam) Via Phnom Penh Port Via Sihanoukville Port

shipping costs not experience the same amount of delays.

Shipping costs through Saigon Port are lower than through Sihanoukville.

season) to 5,000 tons (wet season).

As most of the rubber transits through Vietnam, the quantities transiting through Sihanoukville are not sufficient to allow for large discounts. Discounts based on volume could reduce transport costs from Kampong Cham to Sihanoukville by half.

Procedures and payments

Straightforward procedures, and quick methods of payment.

Complicated and long procedures.

90 day Letters of Credit need to be drafted and guaranteed by a bank. Since most exporters want immediate payment for their goods due to cash flow shortages they appear to be willing to take a reduction in profit.

The two legs have to be arranged for separately since there does not appear to be a freight service from factory (Kampong Cham) to port (Sihanoukville).

Official declarations and export tax

Overland transportation to Vietnam entails possibility of informal exports without full export tax.

Shipment through Phnom Penh or Sihanoukville ports would more likely have to be officially declared and the corresponding export tax paid.

Source: Adapted from ADI (2007), which partly refers to an older study (SOFRECO and CEDAC, 2005).


Constraints in exporting rubber in Cambodia The following provide the main constraints mentioned by exporters during field trips to Kampong Cham and Ratanakiri in 2012 (Table 21).

Table 21. Main constraints for exporting rubber



Limited experience in marketing and exporting.

In the past, there was little effort / opportunity to diversify exports to new partners.

Material inputs -‐-‐-‐

Labour -‐-‐-‐

Technology -‐-‐-‐

Access to finance -‐-‐-‐

Energy -‐-‐-‐

Infrastructure Poor logistics and transport infrastructure (e.g. little information and services about export procedures), high transportation costs.

Long and expensive export procedures (including informal fees).


-‐-‐-‐


Even the largest exporters have generally no knowledge about the end users (since exports go to intermediaries in Singapore, Malaysia, and Vietnam).

Limited knowledge on alternative markets.

Limited international marketing experience. Exporters have difficulties applying for a certificate of origin (CO) for export rubber product to overseas markets. They are not aware of which CO should be used for exports to difference regimes.

Cambodia’s rubber production is not well adapted to world demand. It exports mainly products processed from latex (for which world demand is small and competition fierce and for which Cambodia has an over-‐capacity in processing) and few products from cup lump or coagulum (for which world demand is very large and Cambodia has an under-‐capacity in processing).

Cambodian rubber meets only general specifications and is usually sold on the spot market as a filler for shortfalls in longer term contracts.

Cambodia has neither bargaining power nor impact on international market prices, given it small production, putting the Cambodian rubber industry in a disadvantaged position compared with other larger producers in the region.


Inadequate export infrastructure (small number of experts/companies that know how to export pepper).

Lengthy processing of export documentation and unpredictable export transaction costs.

Interviewed processors / exporters suggest that export tax is too high.

Source: Compiled by Value Chain Unit, based on literature review and interviews with exporters.


Summary and SWOT analysis of the rubber sector in Cambodia

The Cambodian rubber industry is still facing many challenges and constraints that hinder the sector’s development (Table 22). The issues are more prevalent in the smallholding sector, particularly, in the usage of low-‐yielding clones, limited availability of plant material, inappropriate tapping techniques, unpopular credit facility and high interest rates charged by private financial institutions, low international acceptance of Cambodia-‐specified rubber and unexploited direct market access to the international markets (Rubber Asia).

Table 22. Summary and SWOT analysis of the rubber sector in Cambodia

Strengths Weaknesses

Highly fertile red soil ideal for rubber plantation, and available for future expansion of cultivated areas.

Favorable climate condition.

Sumptuous rains and water resources.

Low level of rubber diseases.

Resistant to rubber diseases, especially root disease.

Relatively low cost of labor in rural areas.

Strong economic growth and rapid exports.

Strong commitment by Government and donor communities to promote crop diversification.

Government incentives to promote rubber.

Most rubber plantation area in Cambodia has been converted from forestland.

Low productivity and insufficient rubber extension workers, linked to limited budget, facilities and human resources of GDR.

Low potential investment in rubber sector.

Lack of high skilled workers and professional staffs.

Land concentration.

Institutional and managerial weaknesses.

Not a member of International Rubber Associations (IRA).

Poor market information for smallholder rubber plantations.

Poor R & D and inadequate investment for rubber research on high yield variety and processing.

Inadequate rural infrastructures and high transportation costs.

Long-‐term industrial crop to receive Return on Investment.

Underdeveloped rural finance and limited access to credit.

High cost of utilities and interest rate.

Quality issues.

Lack of adequate training programmes.

Lack of sufficient processing facilities.

Lack of down-‐stream rubber industries.

Absence of policy of large-‐scale promotion of small plantations.

Lack of coordination between the GDR, agro-‐industrial rubber plantations and rubber smallholders.

Opportunities Threats

High rubber price in international market.

High chance to increase rubber yields.

World rubber consumption in an upward trend.

Much of the envisioned increase in world rubber consumption is due to China’s economic growth.

Proximity to China, the world’s largest consumer of rubber.

Better exportation procedures.

Expanding cultivated areas up to 716,600 ha.

RGC’s commitment to promote export for foreign earning.

WTO and ASEAN membership.

Increasing value added price through certification of natural rubber.

Increasing an interest among potential foreign investors in rubber industry.

Employment generation for substantial labor forces.

Possible trading in carbon reduction under the Kyoto Protocol in the long run.

Risks arising from competition from neighboring countries.

Price fluctuation and high risks investment.

Natural disasters (droughts, floods) and rubber diseases.

Slow development on agro-‐industries and processing.

Increased land price.

Political instability and unfavourable macroeconomic environment.

Inadequate investment from RGC and donor communities.

Lack of private sector/potential investors participation.

Source: Adapted from EIC (2007), Rahul Suri, Commodity Online (www.commodityonline.com/news/cambodia-‐beckons-‐indian-‐rubber-‐growers-‐2250-‐3-‐2251.html), MAFF (2011), and interviews by the Value Chain Unit.


Strategies and activities to support Cambodia’s natural rubber sector

Government strategy

Rubber is among the 19 product and service sectors with potential for export diversification, according to Cambodia’s Trade Integration Strategy 2007 launched by the Royal Government of Cambodia (DTIS, 2007).

According to the General Department of Rubber of MAFF (MAFF, 2011), the long-‐term vision for the rubber sector is “to stimulate Cambodia's natural rubber industry to be dynamic and competitive through the prioritization of rubber smallholders plantations aimed at generating regular income for rubber planters, creating jobs in rural areas, contributing to the alleviation of poverty and the sustainable management of Cambodia natural resources.”

The Government targets a total planted area for rubber of 300,000 hectares, of which 235,000 hectares for harvesting, yielding an average production of 290,000 tons by 2020 (Ly, 2011).

The General Department of Rubber of MAFF has laid out key strategies for the development of rubber within 10 years (2011-‐2020) to strengthen and expand the existing opportunities and overcome the challenges encountered. The strategies are (MAFF, 2011):

− To guarantee the quality and productivity of planting material, including by advising farmers and by certifying marketed plant matter;

− To study the legal accessibilities of the potentiality of available land suitable for rubber cultivation;

− To encourage rubber smallholders cultivation by lifting constraints for small, poor farmers, including access to land, technical expertise and tailored financing;

− To promotion rubber estates to be a nucleus of the rubber smallholder development, by granting economic concessions and incentives for the development of smallholder plantations around the large estates;

− To enhance the rubber value chain by promoting quality throughout the sector; and

− To strengthen the General Directorate of Rubber's leadership roles and governance.

Activities by government

The Royal Government of Cambodia (RGC) initiated an overall review of the rubber sector and examined the rules and regulations for marketing rubber products, partly in response to ADB conditions to address the problems that restricted the development of smallholder and family-‐scale rubber production, processing and marketing. From 2000 to 2006, several policy and regulatory reforms were undertaken to promote smallholder rubber plantations and private sector processing factories and collection points. These liberalised private rubber production and marketing, and provided mechanisms for the standardisation of rubber grades to enable Cambodian rubber to fetch higher prices on the global market (Saing, 2011).

The Government and its relevant ministries, in particular MAFF, have undertaken several activities in recent years to develop the rubber sector. These include:

− Privatised nine State-‐owned rubber plantations between 2008 and 2009.

− Introduced a sub-‐decree on Economic Land Concessions (ELCs) and other relevant regulation for dealing with the state public land grant under contract for the purpose of agricultural and agro-‐industrial development to encourage domestic and foreign investors in rubber cultivation.


− Invested in the development of more productive rubber clones and implemented good agronomic management among smallholders.

− Strengthened rubber research to promote more productive rubber breeds in Cambodia, in co-‐operation with regional and international research institutes and through the Cambodian Rubber Research Institute of the General Directorate of Rubber.

− Introduced special economic zones by the Royal Government to develop the rubber downstream industry to encourage the local and foreign investors to invest into the rubber products manufacturing in Cambodia.

In Cambodia, there are two main organizations that are responsible for implementing the governments strategies and policies on rubber: the General Directorate of Rubber (GDR) and the Cambodia Rubber Research Institute (CRRI) (Table 23).

Table 23. Main rubber organizations in Cambodia

Name Nature of Organization Main activities Contact details

General Directorate of Rubber (GDR)

Government body functioning at the national level under Ministry of Agriculture Forestry and Fisheries, Government of Cambodia.

Established: 1981.

Publication: Rubber Bulletin.

Implement the governmental strategy, policy and development program in order to ensure the development of rubber sector in Cambodia.

Prepare the policy, vision, target, missions and strategy for a medium and long term development of rubber industry.

Formulate the judicial bases; standard letters; law on rubber management and monitor and implement the law for all activities of rubber sector in Kingdom of Cambodia.

Strengthen and increase the international marketing strategy for Cambodia Rubber Industry.

Cooperate with developed partners, rubber agencies and other international rubber organizations concerning research and development, science, technology and others.

Ensure the upstream activities for rubber sector.

No.48, Street Neary Klahan, Sangkat Sras Chak, Khan Daun Penh, P.O.Box 40, Phnom Penh, Cambodia

Tel:+855 2323 2050 Fax:+855 2372 2490

Email: [email protected]

Cambodia Rubber Research Institute (CRRI)

Government body.

Established: 1955, 1991.

Publications: Bulletin of Cambodian Rubber Research Institute CRRI Newsletter.

Support the implementation and the follow-‐up of the smallholder development program.

Conduct a research program that will continuously provide the rubber network with diagnostic and study services.

Contribute to the training and the information of the executives and technicians of network.

Participate in the coordination and activities of the different Cambodian rubber organizations (rubber planters).

No.9, St. 289, Boeung Kak 1, Toul Kork, Phnom Penh, Cambodia.

Tel:+855 2388 2830

Fax:+855 2388 2831

Email: [email protected]

Website: www.crri.com.kh

Source: ANRPC (2011), Directory of Rubber Organizations in ANRPC Member Countries, October. The directory covers only those organizations reported to the ANRPC Secretariat by the respective Governments.


The Ministry of Agriculture, Forestry and Fisheries has developed the Agricultural Development Strategic Plan 2009-‐2013, based on the National Strategic Development Plan. For 2012-‐ 2013, MAFF has introduced the following directions (MAFF, 2011, see also Box 12):

− To raise public awareness of Law on Rubber Plantation, expand technical guidance service to farmers, develop mechanisms for certification of varieties garden and varieties gardener training, follow up on the implementation of the investment program and plan on the social economic concession land and evaluate the collection of statistics of family rubber plantation in each province in order to strengthen the family rubber association;

− To liaise with the development partners, rubber agents and international rubber organization in cooperation within the framework of research and development of technology, science, effort to mobilize sources of capital from financial institutions and agencies and other development partners in order to promote the family rubber plantation throughout the country;

− To strengthen the capacity for testing and issuing rubber quality certificate, register rubber processing factories, grant authorization to use the label of the Cambodian Specification of Rubber (CSR) to improve the quality of Cambodia’s rubber, and conduct research for information on supply and demand of rubber and on the trend of rubber price on local and foreign markets;

− To promote private agro-‐industrial rubber plantation as a core to help support the surrounding family-‐scale rubber plantations;

Box 12. Measures and directions of the General Directorate of Rubber

The General Directorate of Rubber has the objective to implement the following activities in 2012:

− Expand the technical guideline services for farmers;

− Formulate the mechanism for budwood garden certification and training for budwood garden cultivators;

− Formulate the draft of law on rubber;

− Monitor the implementation of the plan to invest in social and economic land concession and conduct evaluation;

− Collect the statistics of rubber smallholders in the program budget plan for the year 2012 in 11 target provinces (Ratanakiri, Stung Treng, Mondulkiri, Kratie, Svay Rieng, Kampot, Sihanoukville, Koh Kong, Pursat, and Banteay Meanchey);

− Extent the technical guideline services for farmers in 4 target provinces Ratanakiri, Stung Treng, Mondulkiri and Kratie

− Strengthen the four rubber smallholders association in Kampong Cham province;

− Liaise with the development partners of rubber agencies and international rubber organizations within the cooperative framework of technical and scientific research and development;

− Conduct study research on the information about the supplies and demands of rubber and the trend of rubber price in local and international markets;

− Make a request for the land to create sub-‐stations in provinces;

− Request for public function officials staff to perform the work according to their respective skills in all units under the supervisory control;

− Strengthen the skills to test and issue the certificates of the quality of rubber of 20-‐30 pallets per day;

− Register the rubber processing factories and issue the letters on the utilization of the labels of Cambodian Specified Rubber (CSR) for factories processing rubber CSR for increasing the quality of Cambodia’s rubber.

− Register the rubber processing factories and issue the letters on the utilization of the labels of Cambodian Specified Rubber (CSR) for local labs to receive the rights to issue the certificates of rubber quality;

− Enhance the quality of rubber and defend the rights to the use of the labels of Cambodian Specified Rubber (CSR) by controlling the rubber processing factories and local labs at least twice per year;

− Strengthen the skills to test and issue the certificates of rubber quality and defend the rights to the use of the labels of Cambodian Specified Rubber (CSR) by conduct a comparative test on local labs four times per year;


− Strengthen the capacity of testing and accreditation of local labs for TSRs rubber according to the International Rubber Association (IRA) with Round Robin Crosscheck’s participation to conduct a test twice per year;

− Participate and cooperate with the partners or international specific rubber lab networks and the project of rubber quality development;

− Monitor and collect the data of all rubber plantation’s experiment;

− Prepare and establish the plantations for experiment rubber tree seedlings for exploitation and lab protocol and create the plantations for experiment rubber tree seedlings on infertile soil;

− Participate with technicians from Nagoya University, Kyushu University in Japan and Hawaii University to monitor the data and maintain sap flow and flux tower equipment;

− Participate in the workshops and training courses and prepare the questions and answers to be aired on radio and TV;

− Encourage the private agro-‐industrial rubber plantations to focus on supporting rubber smallholding plantations nearby;

− Conduct fieldwork to examine the situation of agro-‐industrial rubber plantations and smallholdings rubber plantations across the country to collect and evaluate data;

− Continue collecting the data on existing rubber and wood processing factories and new factories establish.

Source: MAFF (2011).

Activities by other stakeholders

The main activities in Cambodia’s rubber sector were funded by the French Agency for Development AFD.

− One AFD project supported smallholder rubber production in Cambodia (PHF). With financial support of AfD, smallholder rubber production projects have been developed in Kompong Cham, the province with the largest share of total rubber production. The project started in 1999 with 349 participating farmers and more than 887 hectares. According to AFD (2008), it fulfilled and even surpassed its quantitative and qualitative objectives in terms of areas planted and quality of plantations. It demonstrated the capacity of smallholder farmers to seize opportunities in a context where rubber plantations were previously only established by national agro-‐industrial companies. In this sense, this project helped establish a sustainable technical benchmark in smallholder rubber production in Cambodia.

− AFD provided also technical assistance and training support to the establishment of rubber certification processes in Cambodia. The project -‐-‐Cambodian Rubber International Certificate Issuance and Commercialization Support Project (PRCC)-‐-‐ supported the National Specific Laboratory House (NSLH) in the Cambodia Rubber Research Institute (CRRI) in establishing a national certification laboratory to test and certify crumb rubber as Cambodian Specified Rubber (CSR) as per international standards. The NSLH received the certificate of ISO/IEC 17025:2005 on rubber quality control in June 2011.

Recommendations As has been seen before, Cambodia’s rubber industry faces many challenges, ranging from a lack of adequate planting materials, security of land tenure, lack of technical support, high processing costs, lack of processing capacities, and virtually complete lack of downstream activities. Table 24 summarizes the main recommendations for government, development partners and the private sector to address Cambodia’s constraints in the rubber sector.


Table 24. Main recommendations for government, development partners and the private sector to address Cambodia’s constraints in the rubber sector

Constraints Possible solution Illustrative interventions National partners for implementation


Promote research on rubber cultivation and improve / extend extension services.

Support research at the Cambodia Rubber Research Institute, universities and agro-‐NGOs on e.g. international best practice on rubber clones, inter-‐cropping, yields, and design of Good Agriculture Practices.

MAFF, CRRI, RUA, Agro-‐NGOs

Improve and extend existing agricultural extension services, and team up with appropriate partners (e.g. input suppliers).

MAFF, RUA

Train farmers in best practices in cultivating rubber and in managing a farm.

Train farmers on most appropriate ways for rubber cultivation (selection of seedlings, selection and use chemical fertilizers and pesticides, etc.) and post-‐harvesting, with emphasis on environmentally sound growing practices.

MAFF, Agro-‐NGOs, private sector

Train farmers on how to manage their business with credit from banks or MFIs to pay back the debt and interests.

MAFF, Agro-‐NGOs, private sector

Train producers and processors on trade and financial issues.

Capacity needs to be built up in understanding how to trade on the international market and utilize such financial instruments such as Letters of Credit, Overdrafts, Futures Markets and Hedging.

MAFF, MEF, private sector

Improve and extend existing trainer networks.

Improve the Agriculture Information Network Service and develop other information exchange systems.

MAFF, RUA, private sector

Material inputs Improve access to appropriate agricultural inputs (fertilizer, seeds, etc.).

Promote the importance of quality agro-‐inputs (high yield clones, fertilizer, pesticides) in both smallholder and private estates.

MAFF, MEF, MoC

Establish a monitoring system that ensures effective control on imports according to existing law (basic legislation on illegal imports of black-‐listed low quality or high poisoning fertilizers and pesticides is already available but not enforced).

MAFF, MEF, MoC

Identify and support key suppliers and nursery services that could provide quality inputs and provide them a certificate so that farmers know where to buy quality inputs.

MAFF, MEF, MoC

Establish a clone collection and exchange centre with management of ownership and licensing clearly defined.

MAFF

Facilitate large scale private processors to provide contract farming services under a nucleus estate model

MAFF

Land Provide land titles and promote alternative plantation area on privileged available land.

Further improve security of land tenure by issuing land certificates, in particular to small-‐scale farmers who lack influence and protection, to enable them conducting long-‐term investment.

MLMUPC, MAFF

Promote and encourage farmers in privileged land to increase plantation area.

MLMUPC, MAFF



Labour Provide training all along the value chain.

See above under Knowledge / Management. MAFF, Agro-‐NGOs, private sector

Attract international lead investment in down-‐stream rubber processing.

Provide investment incentives to international rubber processing companies (lead investor) that have the expertise and management capacity to train and supervise Cambodian labour in rubber processing.

CDC

Technology Provide investment incentives for imported technology.

Provide investment incentives for upgrading processing (e.g. nil tax on imported processing technology).

MEF, CDC

Finance Improve and reinforce the financial infrastructure for rubber-‐related business.

Consider credit-‐promotion programs for the rubber sector that provides producers and processors with short-‐term and long-‐term trade financing at a below-‐market interest rate.

Establish a smallholder fund to assist planting.

MEF, RDB, Banks (Canadia, ACLEDA), Microfinance institutions (MFIs)

Consider establishing an insurance system (currently, there is no insurance in case of natural disasters).

MEF, RDB, Banks (Canadia, ACLEDA), Insurances

Infrastructure Invest in transportation and communication infrastructure.

Improve infrastructure regarding transportation (road, rail) and communication to lower logistics costs and facilitate the integration of markets.

MEF, MPWT

Seek cheaper sources of electricity from neighbouring countries such as Viet Nam and the Lao PDR.

MEF


Support international best practice and quality standards.

Promote research and training on international best practice all along the value chain (see under Knowledge / Management)

MAFF, CRRI, RUA, Agro-‐NGOs, private sector

Upgrade certification laboratories and promote the Cambodian rubber quality standard to build confidence among international buyers and institutions.

MAFF

Facilitate the adoption of ISO certifications and ILO Better factory (and plantation) inspection systems to improve quality standards and labour relations.

MAFF, MIME, ILO, private sector

Learn about industry standards and buyers, and forge linkages and collaborate with international buyers and end-‐users.

MoC, MAFF

Attract international investment in rubber processing.

Provide incentives to (international) investors in rubber processing (e.g. through export processing zones) to bring international best practice to Cambodia.

CDC




Provide relevant and timely information on local and international rubber markets (price trends, global demand and supply).

Improve and extend existing sources of information on prices and markets.

Create and strengthen an independent and self-‐supporting professional farmers’ organisation to address issues related to cultivation, management and marketing information (Farmers are essentially price takers, and farm gate prices are usually squeezed by collectors and traders).

MAFF, MoC, Traders, Media, Agro-‐NGOs

Facilitate access to alternative export markets for traders and processors.

Support the creation of a Cambodian Rubber Exporter Association to provide its members with information on international rubber markets (potential markets, quality requirements), information on export-‐relevant processing technologies, and export procedures.

MoC, MAFF

Conduct targeted market research to identify international buyers and to explore opportunities, and invest in marketing and promotion to gain more export markets.

MoC, MAFF

Invite foreign traders to meet Cambodian traders and organize market study trips for Cambodian traders to major rubber markets.

MoC, MAFF

Business Enabling Environment

Reduce cost of exporting. Reduce formal and informal export costs and speed in Cambodia (e.g. make export processes more transparent, involve less government agencies, reduce the number of inspection and custom clearance procedures, and computerise the systems).

Consider reducing the export tax and domestic sales taxes, as a considerable proportion of the export price goes to hidden expenses, domestic sales tax and export tax, regardless of customs efficiency and logistics competence.

MoC, MAFF

Address the issues of biodiversity conservation, climate change and deforestation.

Find ways to take advantage of the emerging interest in carbon trading, carbon offsets, and emissions trading.

MoC, MAFF


Outlook and investment opportunities Despite the many challenges to overcome, there are significant potential opportunities for investment and market diversification for the rubber sector in Cambodia, as the outlook for the global natural rubber sector is regarded as favourable.

Outlook

The production and demand of natural rubber will continue to strongly increase over the next years. According to Jom Jacob, a senior economist at the Association of Natural Rubber Producing Countries, “tightness in supply will continue until 2018 as production growth is marginal or moderate. A large number of producing rubber trees, which were planted during 1980s, will have to be uprooted between 2012 and 2018, reducing total area of plantations worldwide. Farmers delayed cutting down trees to take advantages of high prices.” (Bloomberg, 20 July 2011, www.bloomberg.com/news/2011-‐07-‐20/rubber-‐supply-‐tightness-‐lasting-‐until-‐2018-‐may-‐raise-‐costs-‐for-‐tiremakers.html).

Global natural rubber consumption is expected to increase from about USD 11 million in 2011 to more than 16 million tons in 2020 (Table 25). Dr Evans, Secretary General of the International Rubber Study Group (IRSG), suggests that “China and India’s automotive sectors will continue to support demand; China has a very big plan for expansion of their automotive sector. Strong vehicle output will definitely lead to strong tyre sales, especially for replacement, as 75% of tyres are sold to the replacement markets” (http://rubberasia.com/v2/index.php?option=com_content&view=article&id=560:over-‐a-‐million-‐tonnes-‐rubber-‐shorgage-‐by-‐2020&catid=5:the-‐best-‐of-‐rubber-‐asia).

Table 25. Forecasts for production, consumption and prices for natural rubber

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Production (1,000 tons) 10,974 11,336 11,805 12,406 13,051 13,715 14,400 15,025 15,645 16,269

Consumption (1,000 tons) 10,924 11,346 11,841 12,383 12,965 13,581 14,229 14,855 15,473 16,201

Supply surplus (+) or deficit (-‐) (1,000 tons) 50 -‐11 -‐36 23 86 135 171 169 172 68

Stock/usage ratio 14.2 13.6 12.7 12.4 12.5 12.9 13.5 14.1 14.6 14.4

Price SMR 20 (USD/ton) 4,454 3,812 3,821 3,756 3,704 3,669 3,647 3,638 3,643 3,649

Source: DBS Group Research (28 May 2012).

However, the strong rise of natural rubber prices over the last years may have come to an end, despite increases in production among key producers that cannot offset rising demand from tire and glove makers. The World Bank forecasts that the price of Malaysian rubber declines from USD 4,820/ton in 2011 to only about USD 3,850 in 2012 and USD 3,000 in 2020 (Table 26). In real terms (i.e. adjusted for inflation and expressed in 2005 US dollars), the relative decline over the next years is even more pronounced, as the real rubber price is forecasted to decline from USD 3,920/ton in 2011 to USD 2,200/ton in 2020, and even less in 2025.

Table 26. Actual and forecasted prices for Malaysian rubber (USD/ton)

1980 1990 2000 2010 2011 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* 2025*

Current prices 1,420 860 670 3,650 4,820 3,850 3,600 3,400 3,200 3,180 3,160 3,140 3,120 3,100 3,000

Real 2005 prices 1,870 890 750 3,240 3,920 3,100 2,870 2,670 2,470 2,410 2,360 2,310 2,250 2,200 1,950

Source: World Bank (www.worldbank,org/prospects/commodities, 12 June, 2012), Table 1: Commodity Prices and Price Forecast in nominal (current) US Dollars (“Rubber, Malaysian”), and Table 2: Commodity Prices and Price Forecast in real 2005 US Dollars (“Rubber, Asia”). * Prices for 2012 and onwards are forecasted.


Potential markets for Cambodia to diversify its exports

Cambodia has favourable market access conditions in most important markets for natural rubber. Though there are four rubber products that are internationally traded, the following examines only technically specified natural rubber (TSNR), as this seems to be Cambodia’s main export product (as seen from its partners’ import statistics, see Table 9 on page 14). According to the International Trade Centre’s Market Access Map, Cambodia has tariff-‐free access for technically specified natural rubber in the European Union, the United States, Japan, Korea, Malaysia and Turkey. On these markets, Cambodia’s main competitors also enjoy 0% tariff-‐rates (Table 27). In contrast, tariffs are high in China (16%), the world’s 5th largest importing country, and in India (20%).

It seems however that Cambodia’s tariffs in China are already zero. Cambodia’s economic integration has been deepened by its entry into ASEAN in 1999 and its commitments under other regional free trade agreements (FTAs) and the global trading system. As of May 2012, Cambodia has 10 FTAs in effect or under negotiation (www.aric.adb.org/FTAbyCountryAll.php). These agreements give Cambodia preferential access to major markets for its rubber exports. Lower tariffs on rubber products under the ASEAN-‐China FTA will thus stimulate greater exports from Cambodia and thus increase domestic rubber production. Cambodia needs to improve the quality of rubber processing to meet the demands of China’s market and provide competitive prices (Hing and Thun, 2009).

Table 27. Tariffs for main exporters of Technically specified natural rubber (TSNR) (HS 400122) on main import markets

Main exporters Main importers European

Union China United

States Japan Rep. of

Korea Malaysia Turkey India

1. Indonesia 0 15.8 0 0 0 0 0 20 2. Thailand 0 15.8 0 0 0 0 0 20 3. Malaysia 0 15.8 0 0 0 0 0 20 4. Viet Nam* 0 15.8 0 0 0 0 0 20 5. Nigeria 0 15.8 0 0 0 0 0 20 6. Côte d'Ivoire* 0 15.8 0 0 0 0 0 20 7. Singapore 0 15.8 0 0 0 0 0 20 8. Luxembourg 0 15.8 0 0 0 0 0 20 9. Liberia* 0 40.0 0 0 0 0 0 20 10. Guatemala 0 15.8 0 0 0 0 0 20 (..) 60. Cambodia 0 15.8 0 0 0 0 0 19.2

Source: ITC’s Market Access Map. The database does not seem to have integrated yet the ASEAN-‐China free trade agreement (FTA).

In order to identify promising markets to diversify Cambodia’s exports, the International Trade Centre (ITC) developed a Market Attractiveness Index. This index takes into account three dimensions: size of importing markets; dynamism of import markets over the last 5 years; and the market access conditions they apply to an exporter country and its main competitors.

Table 28 shows the 20 most attractive markets for technically specified natural rubber (TSNR) (HS 400122) from Cambodia, plus those markets to which Cambodia is already exporting:

− China, the United States, Japan, Germany, the Republic of Korea, and Malaysia appear as the most attractive markets for Cambodian TSNR. These markets tend to be large, dynamic (in particular Malaysia and Germany), and open, since most of them apply zero tariffs for imports from Cambodia. The exception is China (15.8%), though this may be zero and due to ASEAN-‐China FTA). Cambodia also enjoys a slight tariff advantage in China (2.3% lower than the average tariff of its competitors). Other attractive markets are Turkey, France, Spain, Canada, Italy and the Russian Federation.

− Cambodia is already present on some of these markets (when we look at the partners’ statistics), in particular in China, Malaysia, and Korea, and to a lesser extent in the United States, Spain, India, Italy and Belarus. The strategic response for future export development on these markets could be to increase volume, possibly based on existing -‐-‐and new-‐-‐ distribution channels.


− In contrast, Cambodia is not at all present in several attractive markets, in particular in Japan and Germany, the second-‐ and third-‐largest importers in the world, Turkey, France, Canada, the Russian Federation, a very dynamic import market, Mexico, and Brazil, another high-‐growth market. These markets appear as potential diversification markets for TSNR from Cambodia.

It has to be noted that the findings are based solely on statistics. More research thus needs to be undertaken, for example to conduct market profiles that also take into account qualitative information about e.g. the requirements and distribution channels in a particular target market. This would also help to better understand the potential for niche markets.

Table 28. Attractive markets for Technically specified natural rubber (TSNR) (HS 400122), 2010 Market

Index (0, 100)

Size of markets

Dynamism of markets

Openness of markets

Cambodia’s exports to the market

Value of imports

(USD 1,000)

Growth of imports

2006-‐2010 (%/year)

Variation of imports

2006-‐2010 (USD 1,000)

Tariff applied to Cambodia

(%)

Tariff advantage (+) or disadvantage (-‐) (difference in %)

Cambodian statistics

(USD 1,000)

Partner’s statistics

(USD 1,000)

1. China 35.1 4,333,787 14 1,767,837 15.8 2.3 0 36,182 2. United States 28.2 2,507,980 6 521,425 0.0 0.0 0 314 3. Japan 22.2 1,706,926 10 541,073 0.0 0.0 0 0 4. Germany 12.4 716,279 32 480,347 0.0 0.0 0 0 5. Rep. of Korea 12.2 1,006,243 8 266,624 0.0 0.0 0 9,688 6. Malaysia 8.5 491,783 57 410,841 0.0 0.0 138 18,951 7. Turkey 3.4 293,754 7 69,650 0.0 0.0 0 0 8. France 3.3 353,299 3 39,397 0.0 0.0 0 0 9. Spain 3.2 308,464 4 44,788 0.0 0.0 0 652 10. Canada 2.5 217,957 7 51,679 0.0 0.0 0 0 11. Italy 2.5 172,731 14 70,460 0.0 0.0 0 71 12. Russian Fed. 2.0 117,929 102 110,846 0.0 0.0 0 0 13. Mexico 1.7 178,849 5 31,709 0.0 0.0 0 0 14. India 1.6 252,683 72 223,812 19.2 0.5 0 422 15. Brazil 1.4 92,675 580 92,632 4.0 -‐0.2 0 0 16. Singapore 1.2 270,361 -‐2 -‐22,755 0.0 0.0 0 0 17. Netherlands 1.1 68,622 22 37,646 0.0 0.0 0 0 18. Romania 1.1 86,247 13 33,350 0.0 0.0 0 0 19. Argentina 0.9 111,717 5 19,807 0.0 0.0 0 0 20. Portugal 0.8 85,749 7 20,331 0.0 0.0 0 0 25. Belarus 0.4 83,257 0 0 0.0 0.0 0 1,172

Source: ITC’s Trade Map and Market Access Map (retrieved in January 2012). Cambodia does not export to countries marked in bold.

Investment opportunities

The Cambodian rubber sector offers opportunities for both domestic and international investors.

Production increase In Cambodia, the Government forecasts an average production of 290,000 tons by 2020, up from some 40,000 tons in 2010 (Ly, 2011). The increase will come from existing large-‐scale plantations, smallholders and Economic Land Concessions (ECLs). There is also room for improving rubber yield and quality through technical assistance.

Product diversification There are different possibilities to diversify Cambodia’s rubber production:

− Reorient the production of technically specified natural rubber (TSNR) towards highly demanded types (e.g. CSR 10 and CSR 20). Cambodia produces and exports mostly CSR 5 and CSR 5L, which represented about 80 percent of Cambodia’s exports in 2005, but only about 5 percent of total world demand (EIC, 2007). In contrast, the global demand for natural rubber comes mainly from the tire industry, where high-‐grade (high priced) rubber is not required (tire manufacturers only


require CSR10, CSR20 or RSS3), but these products only represent 10 percent of Cambodia’s rubber production. To capture more markets in the future, Cambodia should thus consider producing other types (e.g. CSR10 and CSR20) that are in high world demand for tire production (Hing and Thung, 2009).

− Produce a larger amount of “ribbed smoked sheets”. For the moment, Cambodia produces and exports a limited amount of “ribbed smoked sheets” (RSS), which is a type of crude natural rubber in the form of brown sheets obtained by coagulating latex with an acid, rolling it into sheets, and drying over open wood fires. ADI (2007), referring to SOFRECO and CEDAC (2005), suggests that demand for RSS 3 sheets remains strong among tire manufacturers (Michelin, Bridgestone), that the production of export quality RSS requires only a small investment, and that this quality grade is suitable for smallholder production in Cambodia.

− Move downstream and transform the semi-‐processed products into final goods instead of exporting them. Cambodian processors currently export their semi-‐finished products (dry rubber), which are then further transformed into final products in countries such as Vietnam. Natural rubber is used as a raw material in the manufacturing of industrial products (conveyor belts, rubber rollers, etc.), automotive products (fan belts, radiator hoses, etc.), latex products (rubber gloves, toys hygienic products, etc.) and adhesives (Figure 10). Dr. Abdul Aziz Kadir, Secretary General of the International Rubber Research and Development Board (IRRDB) in Malaysia, asserted that the future is bright for the rubber industry because of its wide product range, which includes the market for birth control (condoms), rubberwood (furniture), and the niche market for rubber-‐based products such as medical products (surgical gloves), foam mattresses, and even artificial flowers (roses).

Figure 10. Major end use for natural rubber

Source: UNCTAD, http://unctad.org/infocomm/anglais/rubber/uses.htm.

However, Cambodia’s ability to transform dry natural rubber into finished products that can be used domestically and internationally is still limited, due to lack of investment, technology and a skilled labor force (EIC, 2007). As is the case in many major rubber-‐producing countries in South East Asia, Cambodia has a very low captive rubber consumption and lacks a significant tire industry (Evans, 2011). As a result, Cambodian companies needed to be part of a global supply chain of the leading companies (e.g. Michelin, Bridgestone). This requires attracting one or several foreign lead investors that can bring the required capital, technology and distribution network. This in turn requires to seriously tackling the main issues that still hamper Cambodia’s competitiveness of the rubber sector.

Natural'rubber'

Transporta/on'sector'

Pneuma/c'/res'and'/re'products;''inner'tubes;'automo/ve'belts'

Industrial'sector'

Products'for'material'handling''(e.g.'conveyor'and'transmission'bel/ng;'/res'for'li>'trucks)'

Other'industrial'goods'(e.g.'hoses;'belts;'plates;'packing'and'sealing'devices;'industrial'gloves;'automo/ve'mats)'

Consumer'sector'

Rubber'clothing'(including'gloves)'and'footwear'

Other'consumer'products''(e.g.'threads;'erasers;'golf'balls;'inflatable'ar/cles;'mats)'

Hygiene'and''medical'sector'

Examina/on'and'surgical'gloves'

Contracep/ves'(condoms;'intraIuterine'devices)'

Other'biomaterials''(e.g.'blood'bags;'syringes;'implantable'devices)'


References

Main references

ADI Agricultural Development International (2007), “Key Regulatory Constraints in the Marketing of Processed and Unprocessed Rubber in Cambodia,” Prepared for Ministry of Agriculture, Forestry and Fisheries, Royal Government of Cambodia, Asian Development Bank, Supporting Policy and Institutional Reforms in the Agriculture Sector, TA 4228-‐CAM

AFD (2008), “Developing Smallholder Rubber Production: Lessons from AFD’s Experience”, written by J. Delarue and N. Noel, March, www.afd.fr/webdav/site/afd/.../26-‐evaluation-‐capitalisation-‐VA.pdf.

CDRI (2009), “Agricultural Trade in the Greater Mekong Subregion: Synthesis of the Case Studies on Cassava and Rubber Production and Trade in GMS countries,” CDRI Working Paper Series No. 46, December.

DAI, ADI and IDE (2008): “Cambodia SME Development in Selected Agri-‐Sectors/Value Chains, Final Scoping and Design Report”, July 2008. A report prepared for the International Finance Corporation/Mekong Private Sector Development Facility (IFC/MPDF) by Development Alternatives Inc (DAI) in association with Agricultural Development International (ADI) and International Development Enterprises (IDE).

EIC Economic Institute of Cambodia (2007), Export Diversification and Value addition for human development, Chapter 10 “Rubber: A Sector with high potential for export earnings,” June.

Hing V. and V. Thun (2009), “Agricultural Trade in the Greater Mekong Subregion: The case of Cassava and Rubber in Cambodia,” CDRI Working Paper Series No. 43, December (www.cdri.org.kh/webdata/download/wp/wp43e.pdf).

Further readings

ADB (2009), “Cambodia: Agriculture Sector Development Program,” Progress Report on Tranche Release, June.

Agence Kampuchea Press (2 June 2011), “Cambodian rubber receives ISO certificate,” www.akp.gov.kh/?p=6923.

ANRPC Association of Natural Rubber Producing Countries (2010), ANRPC Natural Rubber Trends & Statistics, Volume 2 No. 12 December.

Anwar C. (2011), “Identifying better crops for intercropping in the smallholder rubber systems,” Paper presented at the Global Rubber Conference 2011, Phnom Penh November 24-‐26.

Chandy K.T. (no date), Rubber, Booklet No. 241, Plantation crops: PLCS-‐5 (www.inseda.org/Additional%20material/CD%20.../Rubber-‐241.doc).

DBS Vickers (2012), Regional Industry Focus: Rubber Value Chain, DBS Group Research, 17 February. Dourng K. and H. Sok (2005), Non-‐tariff measures facing Asia Pacific exporters: Cambodian case study. Evans S.V. (2011), “Role of natural rubber in economic transformation program,” Paper presented at

the Global Rubber Conference 2011, Phnom Penh November 24-‐26 Ly P. (2011) Speech at the opening ceremony of the Global Rubber Conference 2011, Phnom Penh

November 25. MAFF (2011), Annual Report for agriculture, forestry and fisheries 2010-‐2011. MAFF (2012), Annual conference report, April. Mak K.H. (2011) Speech at the opening ceremony of the Global Rubber Conference 2011, Phnom Penh

November 25.


Rubber Asia, http://rubberasia.com/v2/index.php?option=com_content&view=article&id=628&catid=5, Cambodian NR sector: Emerging hotspot for investment

Saing C.H. (2009),” Export competitiveness of the Cambodian rubber sector relative to other Greater Mekong Subregion suppliers: A simple descriptive analysis,” ARTNeT Greater Mekong Subregion (GMS) Initiative Discussion Paper Series, No. 1, July (www.unescap.org/tid/artnet/mtg/DP%200109.pdf).

World Bank (2011), Global Economic Prospects June 2011; Subject Annex, Global Commodity Markets Annex.

Yem D., N. Top and V. Lic (2011), “Rubber Plantation Development in Cambodia: At What Cost?,” mimeo, September.

Yim C.L. (2011) Speech at the opening ceremony of the Global Rubber Conference 2011, Phnom Penh November 25.

Websites

ANRPC Association of Natural Rubber Producing Countries www.anrpc.org. ARIC free trade agreements (FTAs) database (www.aric.adb.org/FTAbyCountryAll.php). CARD Council for Agriculture and Rural Development, www.card.gov.kh/Home_EN.html. FAO Food and Agriculture Organization, FAOSTAT, http://faostat.fao.org/site/339/default.aspx. IMF International Monetary Fund, IMF Primary Commodity Prices

www.imf.org/external/np/res/commod/index.asp. IRRDB International Rubber Research and Development Board http://www.irrdb.com. ITC International Trade Centre, Trade Map and Market Access Map www.intracen.org/marketanalysis. MAFF Cambodia Ministry of Agriculture, Forestry and Fisheries

www.maff.gov.kh/eng/statistics/index.html. USDA US Department of Agriculture, Foreign Agricultural Service

www.pecad.fas.usda.gov/highlights/2010/01/cambodia.


Annex Annex Table 1. Natural rubber producers in the world, 2010

Level 2010 Dynamism 2010 (Index 2000=100) Production (1,000 tons)

Yield (tons/ha)

Area harvested (1,000 ha)

Production Yield Area harvested

1. Thailand # 3,052 1.58 1,929 134 102 132 2. Indonesia # 2,788 0.91 3,065 186 145 128 3. Malaysia # 859 0.67 1,290 93 93 99 4. India # 851 1.89 450 135 120 113 5. Viet Nam # 754 1.72 439 259 137 189 6. China # 691 1.01 685 143 88 163 7. Philippines # 395 2.86 138 554 325 170 8. Brazil 222 1.79 124 253 192 132 9. Côte d'Ivoire 215 1.59 135 174 85 205 10. Nigeria 143 0.42 345 134 128 105 11. Sri Lanka # 139 1.08 129 159 194 82 12. Guatemala 98 1.47 67 227 138 165 13. Liberia 62 0.83 75 59 83 71 14. Cameroon 55 1.04 53 95 71 133 15. Myanmar 44 0.54 81 167 107 155 16. Cambodia # 38 1.05 36 89 85 104 17. Mexico 31 2.22 14 110 112 98 18. Ecuador 15 1.44 11 365 78 470 19. Ghana 15 0.59 25 172 129 133 20. Guinea 14 1.33 11 200 127 158 21. Gabon 14 1.14 12 125 123 102 22. Bolivia 13 .. .. 118 .. .. 23. Dem. Rep. of the Congo 12 0.23 50 245 93 263 24. Papua New Guinea # 8 0.50 15 170 100 170 25. Bangladesh 6 0.10 59 252 98 258 26. Congo 2 0.81 2 164 113 146 27. Central African Rep. 1 1.08 1 94 155 61 28. Brunei Darussalam 0.23 0.06 4 115 95 121 29. Dominican Republic 0.02 0.40 0.04 29 51 56 World 10,537 1.14 9,244 152 120 126

Source: FAO, FAOSTAT. # Members of the Association of Natural Rubber Producing Countries (ANRPC). There are 29 natural rubber producing countries in the FAO database. The following countries used to produce rubber in the past, but appear to not produce it any more: Colombia, Costa Rica, Guinea-‐Bissau, Peru, Singapore, and Timor-‐Leste.


Annex Table 2. Cambodia’s exports of natural rubber: Cambodian versus mirror statistics (tons) Cambodian statistics Mirror statistics

2006 2007 2008 2009 2010 2006-‐2010

2006 2007 2008 2009 2010* 2006-‐2010*

400110 Natural rubber latex Number of markets 1 0 0 0 3 4 0 0 3 0 0 3 World* 1 0 0 0 400 401 0 0 125 0 0* 125* China 0 0 0 0 324 324 0 0 0 0 0 0 Viet Nam 0 0 0 0 40 40 0 0 0 0 .. 0 Rep. of Korea 0 0 0 0 36 36 0 0 0 0 0 0 Singapore 1 0 0 0 0 1 0 0 0 0 0 0 Malaysia 0 0 0 0 0 0 0 0 70 0 0 70 Chinese Taipei 0 0 0 0 0 0 0 0 39 0 0 39 Argentina 0 0 0 0 0 0 0 0 16 0 0 16 400121 Natural rubber in smoked sheets Number of markets 0 0 0 0 0 0 2 2 2 3 2 4 World* 0 0 0 0 0 0 224 80 414 681 454* 1,853* Viet Nam 0 0 0 0 0 0 144 0 314 521 .. 979 China 0 0 0 0 0 0 80 20 0 100 360 560 Chinese Taipei 0 0 0 0 0 0 0 0 100 0 94 194 Malaysia 0 0 0 0 0 0 0 60 0 60 0 120 400122 Technically specified natural rubber (TSNR) Number of markets 0 0 0 0 1 1 9 6 8 6 8 15 World* 0 0 0 0 63 63 47,540 50,786 34,271 52,390 20,455* 205,442* Malaysia 0 0 0 0 63 63 3,565 7,464 2,535 3,348 4,799 21,711 Viet Nam 0 0 0 0 0 0 38,670 38,438 27,229 42,394 .. 146,731 China 0 0 0 0 0 0 3,674 3,867 3,776 4,783 11,602 27,702 Rep. of Korea 0 0 0 0 0 0 0 19 538 1,677 3,209 5,443 United States 0 0 0 0 0 0 1,286 768 0 20 96 2,170 Spain 0 0 0 0 0 0 192 230 59 0 154 635 Belarus 0 0 0 0 0 0 0 0 0 0 346 346 India 0 0 0 0 0 0 0 0 0 0 230 230 Thailand 0 0 0 0 0 0 0 0 0 168 0 168 Germany 0 0 0 0 0 0 38 0 58 0 0 96 Chinese Taipei 0 0 0 0 0 0 58 0 0 0 0 58 Italy 0 0 0 0 0 0 0 0 38 0 19 57 Belgium 0 0 0 0 0 0 0 0 38 0 0 38 Canada 0 0 0 0 0 0 38 0 0 0 0 38 Czech Republic 0 0 0 0 0 0 19 0 0 0 0 19 400129 Natural rubber in other forms Number of markets 4 7 6 8 12 18 5 3 4 4 3 9 World* 23,292 20,359 11,881 30,969 26,568 113,069 2,326 2,654 2,540 222 1,262* 9,004* Viet Nam 19,374 17,582 9,844 24,618 19,577 90,995 0 0 1,180 40 .. 1,220 Malaysia 1,382 1,098 883 1,276 2,331 6,970 0 0 0 0 0 0 Singapore 2,483 1,391 950 1,184 613 6,621 0 0 0 0 0 0 China 0 0 50 1,874 1,717 3,641 1,993 2,555 1,201 100 360 6,209 Thailand 0 192 0 248 977 1,417 0 0 0 0 0 0 Rep. of Korea 53 0 0 805 462 1,320 96 0 0 20 439 555 Hong Kong, China 0 0 0 943 0 943 0 0 0 0 0 0 Chinese Taipei 0 0 0 0 313 313 160 78 119 0 463 820 Belarus 0 0 0 0 242 242 0 0 0 0 0 0 India 0 0 0 0 121 121 0 0 0 0 0 0 Switzerland 0 0 0 0 100 100 0 0 0 0 0 0 United States 0 0 96 20 0 116 0 0 0 0 0 0 Indonesia 0 0 0 0 58 58 0 0 0 0 0 0 Germany 0 0 58 0 0 58 0 0 0 0 0 0 South Africa 0 0 0 0 58 58 0 0 0 0 0 0 France 0 38 0 0 0 38 0 0 0 0 0 0 Italy 0 38 0 0 0 38 0 0 0 62 0 62 Spain 0 19 0 0 0 19 0 0 0 0 0 0 Czech Republic 0 0 0 0 0 0 58 0 0 0 0 58 Japan 0 0 0 0 0 0 0 0 40 0 0 40 Russian Federation 0 0 0 0 0 0 0 21 0 0 0 21 Portugal 0 0 0 0 0 0 19 0 0 0 0 19

Source: ITC’s Trade Map (retrieved in January 2012). * Mirror data for the world in 2010 and the sum 2006-‐2010 are underestimated, as they do not include Vietnam.


Annex Table 3. Top natural rubber exporters in the world (world market share in %, 2010) 4001 Natural rubber 400110 NR latex,

whether or not prevulcanised

400121 Natural rubber in smoked sheets

400122 Technically specified natural rubber

(TSNR)

400129 Natural rubber in other forms nes

110 exporters 75 exporters 57 exporters 78 exporters 95 exporters 1. Thailand # (32.9) 1. Thailand # (70.5) 1. Thailand # (75.4) 1. Indonesia # (43.7) 1. Thailand # (32.4) 2. Indonesia # (30.6) 2. Malaysia # (6.3) 2. Indonesia # (6.3) 2. Thailand # (18.9) 2. Netherlands (13.4) 3. Malaysia # (11.9) 3. Viet Nam* # (5.4) 3. Myanmar* (4.0) 3. Malaysia # (16.3) 3. Viet Nam* # (11.7) 4. Viet Nam* # (5.4) 4. Belgium (2.8) 4. Singapore # (3.9) 4. Viet Nam* # (5.1) 4. Côte d'Ivoire (10.3) 5. Côte d'Ivoire (2.8) 5. Guatemala (2.7) 5. Viet Nam* # (2.8) 5. Nigeria (3.4) 5. Germany (6.6)

6. Nigeria (2.3) 6. Liberia* (2.0) 6. Sri Lanka # (2.2) 6. Côte d'Ivoire (2.9) 6. Cambodia # (4.1) 7. Singapore # (1.7) 7. Indonesia # (1.2) 7. China # (1.7) 7. Singapore # (1.7) 7. Sri Lanka # (4.1)

8. Germany (1.3) 8. India # (0.9) 8. Malaysia # (1.2) 8. Luxembourg (1.6) 8. Philippines # (2.7) 9. Luxembourg (1.2) 9. Cameroon (0.9) 9. Lao PDR* (0.5) 9. Liberia* (1.0) 9. United States (2.1) 10. Netherlands (1.1) 10. United States (0.8) 10. India # (0.4) 10. Guatemala (1.0) 10. Liberia* (1.8) 19. Cambodia # (0.3) 32. Cambodia # (0.0) 60. Cambodia # (0.0)

Source: ITC’s Trade Map (retrieved in January 2012). * Countries with mirror statistics. # Members of The Association of Natural Rubber Producing Countries (ANRPC).

Annex Table 4. Top natural rubber importers in the world, (world market share in %, 2010) 4001 Natural rubber 400110 Natural rubber

latex, whether or not prevulcanised

400121 Natural rubber in smoked sheets

400122 Technically specified natural rubber

(TSNR)

400129 Natural rubber in other forms nes

184 importers 149 importers 90 importers 124 importers 155 importers 1. China # (23.8) 1. Malaysia # (33.4) 1. China # (23.3) 1. China # (30.0) 1. Brazil (14.4)

2. United States (12.6) 2. China # (18.0) 2. Japan (19.1) 2. United States (17.3) 2. Germany (11.4) 3. Japan (10.2) 3. Netherlands (4.7) 3. United States (11.4) 3. Japan (11.8) 3. Chinese Taipei (9.1)

4. Malaysia # (7.6) 4. Iran (3.8) 4. India # (7.6) 4. Rep. of Korea (7.0) 4. Malaysia # (6.1) 5. Germany (5.3) 5. United States (3.5) 5. Brazil (5.1) 5. Germany (5.0) 5. Spain (5.6)

6. Rep. of Korea (5.0) 6. Germany (3.4) 6. Malaysia # (4.1) 6. Malaysia # (3.4) 6. Czech Republic (5.5) 7. Brazil (3.3) 7. Belgium (3.3) 7. Singapore # (3.6) 7. France (2.4) 7. Slovakia (4.6)

8. France (2.4) 8. United Kingdom (3.3) 8. France (3.2) 8. Spain (2.1) 8. Netherlands (4.4) 9. Spain (2.4) 9. Japan (3.0) 9. Rep. of Korea (2.9) 9. Turkey (2.0) 9. Poland (4.3)

10. India # (2.3) 10. Rep. of Korea (2.7) 10. Turkey (2.9) 10. Singapore # (1.9) 10. Italy (3.8) 128. Cambodia # (0.0) 132. Cambodia # (0.0) 108. Cambodia # (0.0) 103. Cambodia # (0.0)

Source: ITC’s Trade Map (retrieved in January 2012). * Countries with mirror statistics. # Members of ANRPC.


Annex Table 5. Rubber exporters in Cambodia Name and Address of Firms

NR Grades Exported

Export Destinations

Contact Details

An Mady Company Group (Chamcar Angdong Rubber Plantation and Peam Cheang Rubber Plantation)

CSR L/ 5 /10 /20 Low Grade

Vietnam Malaysia

Oknha AN MADY Oknha Khoeung Noupheap Tel: +855 1 2405959 / 1 2970052 Fax: +855 4 2394757 / 4 2340289 Email: [email protected]

Krek (Cambodia) Co., Ltd CSR L/ 5 /10 /20 Low Grade

Vietnam Malaysia Singapore

Oknha Seak Piseth Mr. Leang Chanthyvuth Tel: +855 1 2960005 / 1 2907792 / 1 2879935 Fax: +855 4 2340137 Email: [email protected]

Long Sreng International Co., Ltd (Boeung Ket Rubber Plantation)


Vietnam Oknha Heng Long Oknha Heng Sreng Tel: +855 1 2939090 / 1 2486666 / 1 1928888 Fax: +855 2 3221122 Email: [email protected] Website: www.ls-‐international.com

Memot Rubber Plantation Co.,Ltd


Vietnam Malaysia

Mr. Lim Sunleang Tel: +855 1 2998948

Sopheak Nika Investment Group Co., Ltd (Chup Rubber Plantation)


Vietnam Malaysia Singapore

Oknha Mak Kimhong Mr. Men Sopheak Tel: +855 1 2810061 / 1 7555533 / 1 1300911 Fax: +855 2 3884658 +8554 2340030 Email: [email protected]

Swift Resources Limited (Snoul Rubber Plantation) (Labansiek Rubber Plantation)


Vietnam China

Mrs. Ma Muk Ying Tel :+8559 79322299 / 4 2340289 Email: swift-‐[email protected]/ [email protected]

Tapao Rubber Plantation CSR L/ 5 /10 /20 Low Grade

Vietnam Oknha Kim Kao Tel: +855 4 2340126 Fax: +855 4 2340126

Source: ANRPC (2011), Directory of Natural Rubber Exporters in ANRPC Member Countries, October. The directory covers only those exporters reported to the ANRPC Secretariat by the respective Governments.


Annex Table 6. Cambodian statistics on rubber area, production, and yields, 1922-‐1967 Year Total planted

(ha) Immature

(ha) Mature

(ha) Production

(tons) Yield


1922 1,224 1,224 0 0 0 .. 1923 1,928 1,928 0 0 0 .. 1924 2,884 2,884 0 0 0 .. 1925 5,723 5,723 0 0 0 .. 1926 8,114 8,114 0 0 0 .. 1927 10,923 10,923 0 0 0 .. 1928 15,286 14,086 1,200 196 163 .. 1929 18,542 16,742 1,800 340 189 .. 1930 22,959 21,159 1,800 482 268 .. 1931 25,618 21,118 4,500 698 155 .. 1932 26,218 20,618 5,600 1,570 280 .. 1933 26,218 18,518 7,700 2,265 294 .. 1934 26,436 13,236 13,200 3,288 249 .. 1935 26,441 5,862 20,579 6,496 316 .. 1936 26,441 2,787 23,654 10,147 429 .. 1937 26,469 2,019 24,450 13,715 561 .. 1938 26,667 1,749 24,918 15,278 613 .. 1939 28,005 2,804 25,201 17,327 687 .. 1940 27,977 1,970 26,007 19,988 768 .. 1941 28,085 2,278 25,807 20,821 807 .. 1942 28,094 2,287 25,807 21,492 833 .. 1943 28,264 2,757 25,507 21,616 847 .. 1944 30,184 5,472 24,712 18,346 742 .. 1945 29,922 6,235 23,687 4,552 192 .. 1946 30,207 11,587 18,620 6,563 352 .. 1947 30,240 10,514 19,726 13,212 670 .. 1948 30,225 10,037 20,188 16,335 809 .. 1949 30,281 10,061 20,220 15,616 772 .. 1950 30,386 8,207 22,179 15,295 690 .. 1951 30,397 7,103 23,294 15,631 671 .. 1952 30,681 5,499 25,182 18,432 732 16,284 1953 30,721 4,181 26,540 22,388 844 21,074 1954 31,271 3,559 27,712 24,127 871 30,014 1955 31,536 2,548 28,988 27,848 961 29,258 1956 32,432 4,035 28,397 32,094 1,130 29,813 1957 34,398 5,996 28,402 31,684 1,116 34,794 1958 36,053 7,466 28,587 33,621 1,176 37,347 1959 37,905 9,316 28,589 34,468 1,206 38,283 1960 41,644 13,220 28,424 37,109 1,306 40,466 1961 47,691 18,937 28,754 39,980 1,390 35,957 1962 51,794 22,987 28,807 41,559 1,443 36,220 1963 54,524 24,527 29,997 40,755 1,359 42,168 1964 56,048 25,143 30,905 45,760 1,481 47,605 1965 59,050 25,893 33,157 48,959 1,477 45,378 1966 62,211 26,748 35,463 51,350 1,448 50,782 1967 64,054 24,907 39,147 53,716 1,372 47,655

Source: MAFF (2011), referring to Association des planteurs de caoutchouc au Cambodge (APCC), SONEXIM (1967).


Annex Table 7. Cambodian statistics on rubber area, production, and yields, 1980-‐2011 Year Total planted

(ha) Immature

(ha) Mature

(ha) Production

(tons) Yield


1980 5,000 0 5,000 1,300 260 1,454 1981 8,800 0 8,800 4,000 450 2,616 1982 11,800 0 11,800 7,000 590 8,000 1983 14,546 0 14,546 9,000 610 10,021 1984 19,506 0 19,506 13,388 680 13,307 1985 26,300 0 26,300 17,645 490 16,421 1986 35,779 0 35,779 24,497 680 23,280 1987 40,000 0 40,000 24,917 620 26,335 1988 41,500 0 41,500 31,380 750 29,968 1989 46,789 0 46,789 33,645 710 33,727 1990 51,160 38 51,122 34,700 680 25,563 1991 51,670 100 51,570 35,000 670 24,807 1992 50,835 126 50,709 28,364 550 26,645 1993 43,545 211 43,334 22,345 510 20,990 1994 42,817 241 42,576 30,585 710 30,742 1995 45,048 525 44,523 35,427 800 34,413 1996 45,538 1,138 44,400 43,891 990 41,607 1997 44,466 967 43,499 43,503 1,000 44,799 1998 42,625 1,161 41,464 41,398 1,000 39,966 1999 38,413 1,055 37,358 44,043 1,180 43,221 2000 53,722 11,024 42,698 42,007 980 40,066 2001 51,458 13,778 37,680 38,562 1,020 35,672 2002 55,582 18,809 36,773 32,384 880 36,774 2003 53,527 19,831 33,696 32,382 960 32,764 2004 54,209 22,619 31,590 33,770 1,060 33,558 2005 60,406 30,004 30,402 29,464 960 29,950 2006 69,994 37,604 32,390 32,077 990 31,184 2007 82,059 51,568 30,491 32,975 1,080 33,121 2008 108,510 74,197 34,313 37,050 1,080 36,000 2009 129,920 95,785 34,135 37,380 1,095 36,500 2010 181,433 143,027 38,406 42,466 1,100 45,000 2011 213,104 167,942 45,162 51,339 1,137 44,969

Source: MAFF (2011); update for 2011 from MAFF Annual Report (2011).


Annex Figure 1. Natural rubber production in Cambodia, 1961-‐2011

Source: FAOSTAT; MAFF, Annual report 2011; ANRPC, Natural rubber trends and statistics, December 2010.

!FAO!(unofficial!data!or!imputed!or!es5mated!by!FAO)!

!FAO!(official!Cambodian!data)!

0!

10,000!

20,000!

30,000!

40,000!

50,000!

60,000!

70,000!

1960! 1965! 1970! 1975! 1980! 1985! 1990! 1995! 2000! 2005! 2010!

ANRPC!

MAFF!

rubber sector profile - ministry of commerce · 2014-08-28 · ii! preface!...

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