Bearish sentiment still strong for domestic rubber price

Mon State’s rubber market data showed the price of domestic natural rubber remained low at K740-830 per pound in a sluggish market.
The natural quality rubber was priced at K750 per pound in late January 2021. It reached K950-980 per pound (for RSS1 and RSS3) in the second week of March 2021, following positive global cues. The price is in bear market trends at present on the back of weak demand.
Usually, Myanmar’s natural rubber price is tracking the global rates, Myanmar Rubber Planters and Producers Association (MRPPA) stated.
The pandemic hinders international producers. Consequently, natural rubber prices went into the bear market in 2020. However, the natural rubber hit up to K1,000 per pound at the end of 2020.
Myanmar’s rubber is priced lower than the international rate owing to raw material variability. Rubber price stood at US$2,600 per tonne in 2020-end in global market, whereas Myanmar rubber fetches only $2,100 per tonne.
Myanmar’s rubber body is endeavouring to export its natural rubber with a country of origin labelling to external markets. Nevertheless, illegal exports are happening, and it contributes to revenue losses. Thailand is buying Myanmar’s natural rubber at a reasonable price through the black market in Phayathonzu, Kawthoung and Myeik towns. As a result of this, the government needs to control illegal rubber exports strictly, MRPPA stated.
Additionally, natural rubber is estimated at K1,300 per pound in Thailand. In contrast, Myanmar’s rubber is priced about K400 lower than their prices, market’s data showed.
Myanmar’s rubber has raw material variability, and it may lead to quality compliance issues, process inconsistency, productivity problem and high input cost. Meanwhile, Thailand’s rubber is priced at a premium due to its quality and consistency. Thailand’s rubber fetches US$2,500 per tonne, while the global rate is at $2,200 per tonne, the association reported.
Rubber is primarily produced in Mon and Kayin states and Taninthayi, Bago, and Yangon regions in Myanmar. As per 2018-2019 rubber season’s data, there are over 1.628 million acres of rubber plantations in Myanmar, with Mon State accounting for 497,153 acres, followed by Taninthayi Region with 348,344 acres and Kayin State with 270,760 acres. About 300,000 tonnes of rubber is produced annually across the country. Seventy per cent of rubber made in Myanmar goes to China. It is also shipped to Singapore, Indonesia, Malaysia, Viet Nam, the Republic of Korea, India, Japan, and other countries, according to the MRPPA.
Myanmar yearly exports over 200,000 tonnes of natural rubber to foreign countries, generating over $200 million. — GNLM