By Nyein Nyein
Illegal export of Myanmar’s natural rubber to Thailand and re-export by Thailand damage the country’s reputation, according to the Myanmar Rubber Planters and Producers Association (MRPPA).
“This matters with the country’s image. Our products are illegally sent to other countries and the recipient country of Myanmar rubber re-exports them to other foreign markets under its label. Otherwise, it damages our country’s image. We need to build national branding,” said MRPPA Chair U Aung Myint Htoo. Furthermore, quality and country risk are more closely related to premium pricing. Earlier, the price of Thailand’s rubber stayed lower than Malaysia’s rubber rate, he continued.
“The uniformity is an important quality measure. Tyre manufacturers do not need to change the formula in the production process because of raw material risks. The product uniformity can bring sustainable development for both sides. If there is no raw material variability and risk factor, the price will automatically go up,” he affirmed. 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, contributing to revenue losses, U Khaing Myint, secretary of MRPPA.
“We want to sell them in the external market with the country of origin label. Illegal exports cannot make large profits, also damage the country’s image. Thailand will re-exports those illegally imported rubber under its origin label. This being so, we want to earn country of origin label,” he said.
Additionally, the natural rubber fetched K1,300 per pound in Thailand, whereas Myanmar’s rubber is priced K400-K500 lower than their prices, he added.
“When Thailand experienced a slump in natural rubber production amid the labour shortage and flood problems, they sent the domestic and foreign goods together to the external market. In that case, we can see market exploitation. They bought Myanmar’s natural rubber at a lower rate than the current market price in Thailand. For instance, they purchase natural rubber at a lower cost of K800 per pound when the market value is around K1,300. Thailand is the world’s biggest natural rubber producer, making an estimated 4.8 million tonnes of rubber per year. Additionally, they can make premium pricing, MRPPA stated.
“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 quality and consistency. Thailand’s rubber fetches US$2,500 per tonne, while the global rate is at $2,200 per tonne, said the MRPPA secretary. Thailand is buying Myanmar’s natural rubber at a reasonable price through the black market in Payathonzu, Kawthoung and Myeik towns. Myanmar’s natural rubber is valued only K750-800 per pound in legitimate export, the MRPPA stated.
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 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. (Translated by Ei Myat Mon)