Amid the fall in global demand, Cambodia earned
$121 million from the exports of rubber articles in the first month of this year, an increase of 123.5 percent compared to the same period last year, according to the latest trade data of the General Department of Customs and Excise (GDCE).
The data indicated that the rising trend in Cambodia’s rubber exports that started in the latter half of 2022 continued for the whole of last year and extended to January this year as well.
It may be noted that Cambodia earned $919 million from the export of rubber and rubber articles in 2023, recording a growth of 69.6 percent compared to the previous year. The Cambodian rubber market mainly consists of China, Vietnam, Malaysia, Singapore, India, and the EU.
Meanwhile, according to the Kuala Lumpur-based Association of Natural Rubber Producing Countries (ANRPC), the global production of natural rubber went up by 9.1 percent in December last, reaching 1.5 million tonnes.
Heng Guan, Secretary-General of ANRPC, said that the demand for natural rubber, however, experienced a contraction of 3.2 percent, totalling 1.2 million tonnes. This dynamic has led to a diverse performance across key rubber markets, he pointed out.
Thailand was the biggest producer of natural rubber last year, followed by Indonesia, Vietnam, China, India, Malaysia and Cambodia.
China continued to be the biggest consumer of natural rubber, followed by India, Thailand and Malaysia.
In 2023, global natural rubber market was anticipated to reach 14.69 million tonnes while consumption was projected at 14.738 million tonnes.
According to experts, the market for natural rubber continues to face major economic headwinds, especially due to the less-than-expected growth of the Chinese economy in the second quarter of the year. China is the biggest producer of tyre in the world.
Adding to this are the impacts of the prolonged Russia-Ukraine and Israel-Hamas wars and high borrowing costs from interest rate hikes.
As a result of these, the price of rubber fell by nearly 15 percent in the international market last year. In fact, for the first eight months in 2023, the average price of rubber in Cambodia was only $1,327 per tonne, down $230 per tonne from the same period last year, reports revealed.
“Stubborn inflation and a projected slowdown in the recovery of the global economy in 2023 were major concerns,” said Heng Guan, Secretary-General of ANRPC in a report last year.
According to the Ministry of Agriculture, Forestry and Fisheries, in 2021, Cambodia has more than 400,000 hectares of rubber plantations. Cambodia also has 168 rubber processing factories and handicraft centres in 11 provinces.
Kampong Thom is the leading rubber-producing province in Cambodia with 15.4 of the total crop area, followed by Mondulkiri (8.4 percent) and Stung Treng (4.2 percent), according to the ANRPC data.
While the Kingdom was exporting almost all its natural rubber a few years ago, the launch of several tyre factories, especially by Chinese companies last year, resulted in higher demand internally for Cambodian rubber.
Manufacturers in China, the world’s largest producer and exporter of tyres, started building more factories abroad to meet rebounding market demand following the reopening of the country in the aftermath of Covid-19.
China’s annual tyre output makes up more than half of the global total. But lately, many firms have started building plants abroad, especially in Cambodia, a major producer of rubber, to take advantage of the low production costs.
One of the first to launch in the Kingdom, General Tire Technology (Cambodia) kicked off operations at its $300 million Cambodia factory in Sihanoukville Special Economic Zone (SSEZ) a week ago. The plant is capable of manufacturing five million semi-steel radial tyres and 900,000 all-steel radial tyres per year.
The plant, located in Cambodia’s coastal province of Preah Sihanouk, is a subsidiary of Chinese tyre maker from Jiangsu named General Science Technology. Tyres produced at the plant are being mainly exported to the US, Europe, and Brazil.
China’s Doublestar Tire Industrial, also started constructing its $200 million plant in the Special Economic Zone of Kratie with an annual production capacity of 8.5 million radial tyres.
Just last week, Cart Tire Co Ltd, the largest Chinese modern tyre manufacturer operating on behalf of Sailun Group launched its first car tyre made in Cambodia known as ‘Sailun’.
According to company sources, the factory in Svay Rieng province can produce up to 35,000 tyres per day in the first phase. They are also planning to build two more factories in Cambodia.
