KUALA LUMPUR: The Rubber Production Incentive (IPG) scheme ensures that the farm-gate rubber price for smallholders will not be affected by the decline in world market prices, the Malaysian Rubber Board (LGM) said.
It said the government is concerned over the current situation of rubber prices and will continue to ensure the well-being of smallholders through the IPG implementation.
“Globally, Malaysia continues to cooperate with Thailand and Indonesia under the International Tripartite Rubber Council (ITRC) framework to address the prolonged decline in rubber prices through measures such as the supply management scheme, demand promotion scheme and agreed export tonnage scheme,” it said in a statement yesterday.
LGM said the continued decline in rubber prices in the world market in early October 2019 was influenced by the negative sentiment in the Chinese market, the world’s largest natural rubber consumer.
“As reported by the international media recently, a major Chinese merchant company, which imports 1.6 million tonnes of rubber a year from major rubber producing countries, has halted rubber purchases and has also terminated all remaining rubber trade contracts.
“This situation has affected the world rubber market, including that of Malaysia with the price of Standard Malaysian Rubber (SMR) grade 20 falling to its lowest level in 2019 at RM5.16 a kg on Oct 4,” said LGM.
It said the rubber price performance in the first half of 2019 showed an upward trend in which SMR grade 20 rubber price rose 9.5 per cent to RM6.21 a kg in the second quarter compared to RM5.67 per kg in the first quarter due to lower rubber supply.
“The lower rubber supply was due to autumn, pestalotiopsis disease in some key areas of Indonesia, and implementation of rubber exports by Thailand, Indonesia and Malaysia under the ITRC framework,” it said.
However, LGM said the rubber price performance began to show a decline since the third quarter of 2019 with the SMR price falling 10 per cent to RM5.59 per kg compared to the second quarter.
The decline in rubber prices during this period was influenced by slowing rubber demand due to the continued US-China trade tensions that have affected global and China’s economy, it added. – Bernama
Source: The Borneo Post (www.theborneopost.com)