Dr. L M K Thilakaratne

In spite of advantages such as adequate land, cheap labour, abundance of water, peaceful atmosphere etc, the growth of the rubber industry in Cambodia is barred/affected by NR price crash and acute power shortage

Cambodia is a South East Asian country with a land area of 181,035 sq.km, neighbouring the two NR producing giants –Thailand and Vietnam. The population in Cambodia was 15.5 million in 2012. They have a labour force of 8.053 million males and 3.808 million females. In Cambodia, NR industry is a prioritised sector after rice production. The country has peace, security and public order.

Birth of CRRI

The Cambodian Rubber Research Institute, commonly known as CRRI, was established in 1959, in Kampong Cham, at the initiative of the Rubber Planters Association of Cambodia (APCC). In 1964, it came under the Royal Government of Cambodia.

The research activities of the CRRI, stopped due to war in 1970, were re-established in 1991 at a department under the Director General of the Rubber Plantations. In 1995, a block of land was allocated to CRRI for research purposes and the CRRI started functioning in full swing from 1996.

The main objectives of this apex body are:

  • Supporting the implementation of the programmes promoting the development of rubber plantations

  • Providing quality planting materials of proven high-yielding clones for farmers.

  • Improving exploitation techniques to increase yields

  • Taking steps to improve the quality of Cambodian rubber to be exported at international prices under the label of Cambodian Standard Rubber (CSR).

  • Conducting promotion sessions for dissemination of transfer of new technologies to improve the knowledge of farmers and increase productivity of rubber lands.

Impact of price crash

The main traditional area for NR plantation in Cambodia is Kampng Cham which is at an altitude of 200m above sea level. The secondary area Ratanakiri province is 300 to 500 meters above sea level, with a cool climate of average day-time temperature of around 22c.

Rubber production/ extent statistics

Year

2012

2013

2014

2015

2016

NR production MT

64,525

85,288

97,054

157,000

206,500

Total extent in Ha

328,778

357,810

362,350

384,350

Mature area Ha

78,493

90,545

The plan of Cambodia before the rubber price crisis was to increase the extent in 2015 to 362,350 Ha and production to 157,000 MT. In 2016, it proposed to further raise rubber area to 384,350 Ha and production to 206,500 MT.

The several neighbouring countries in the region, namely, Vietnam, Malaysia, China, Thailand, Sri lanka and India, have already invested in rubber planting projects in Cambodia’s fertile red soil with flat terrains. Some of those plantations are close to start exploitation soon. In Mondul Kiri province, most of such plantations are managed by the Europeans.

Following the steep rubber price fall crisis, most of the banks funding new planting programs in the country stopped paying the third and fourth instalments of the soft agricultural loans provided to the farmers. Consequently, most of the immature plantations in the country have been totally neglected by the smallholders without weeding and manuring. Thus the production forecast for the future is likely to be badly affected by the price fall crisis.

Role of smallholders

Smallholders in Cambodia account for about 40% of the total planted area. But in Ratanakiri province, the SH percentage is about 50% (33,912 Ha). In the adjoining Modul Kiri province too, 26% of the plantation (9,588 Ha) is owned by the smallholders. They are the potential suppliers of latex and scrap for TSR manufacturers in the future. But in Kampong Thom province, only 4,224 Ha (7%) of the total area belongs to smallholders.

At present, there are 30 TSR factories in Cambodia, some of which are converting latex into TSR L grade of top international quality, while the others convert field coagula to TSR 5, 10 , 20 and 50 grades, mainly in Kampong Cham province. Hence the demand for scrap in that province is quite high. But in Ratanakiri province, where there are no TSR factories, the area has been recommended by the CRRI to set up new TSR factories in future.

Chup Rubber Company in Kampong Cham has got its TSR testing laboratory accredited by Vietnam to issue CSR certificates for the export of their produce. A few years ago, while Chup Rubber Company exported their produce with a shipment certificate issued by them, other TSR manufacturers sold their rubber at the border of Vietnam and Thailand, unspecified at a discount price for those neighbouring countries to buy their quality rubber cheaply and test and grade and re export under their country names.

Testing facilities

Thanks to the technical support granted by the United Nations Industrial Development Organization (UNIDO), now there is a Central Specifications Laboratory (CSL) set up by the Cambodian Government in Phnom Penh city to cater to the needs of the TSR manufacturers who do not have testing facilities. This fully-equipped laboratory has got the ISO 17025 accreditation from the Bureau of Accreditation Vietnam. Objectives of this laboratory are:

  • Testing of TSR produced in Cambodia for quality control

  • Register local laboratories and train operators

  • Official recognition of CSR factories and conducting regular inspection

  • Participate in the international Round Robin cross check

Further, with the technical and financial support from UNIDO, the Central Specifications Laboratory of the CRRI has broadened their scope by introducing end-products and rubber compound testing facilities as well with the prime objective of promoting rubber products manufacturing industry in Cambodia and adding value to this valuable industrial commodity.

Energy crisis

The major drawback for the development of the rubber industry in Cambodia is the lack of sufficient electric power at a reasonable tariff rate. In Ratanakiri province, power is available from Vietnam at US $ 0.16/ kWh.

But in other provinces there is no power available, and hence industries have to generate power to meet their needs at a high cost. But, they have plenty of water and cheap labour available in the country for rubber industries.

But for these drawbacks and the unexpected decline in NR rubber prices in the world market during the last couple of years, natural rubber industry would have already become the most flourishing sector after rice production in Cambodia.

(The author is a former Director, Rubber Research Institute of Sri Lanka (RRISL))