Mon State Missing Out on Rubber Profits

By Hintharnee 8 August 2017

MAWLAMYINE, Mon State — Mon State rubber, which accounts for nearly half of Myanmar’s production of rubber, loses hundreds of millions of kyats in rubber exports because it is unable to produce high-grade rubber and relies solely on the Chinese market for exports, according to Mon State minister for agriculture, livestock, transportation and communications U Tun Htay.

“We are losing around 400 million kyats annually in unrealized profits as we are not able to produce high-grade rubber,” the minister said.

Mon State produces more than 100,000 tons of rubber per year and possesses 30 percent of the total rubber plantation acreage in Myanmar and 49 percent of the total output.

The state, however, can only produce a small amount of ribbed smoked sheet (RSS) rubber, categorized into grades one, two, and three.

Only the Shwe Yaung Pya rubber plantation operated by Max Myanmar Co. in Kyaikto Township, and Shwe Taungtan rubber plantation in Thanbyuzayat Township can produce RSS-grade rubber and export to foreign markets other than China.

Other Mon State plantations produce low-grade raw rubber, which is refined by processing plants and produced as technically standard rubber (TSR).

The Mon State chief minister on his Japan visit last month brought some rubber samples, and negotiated with Japanese agencies to help produce high-grade rubber for export to Japan, said head of Mon State agricultural department U Kyi Soe.

“We plan to establish a central rubber market probably in October in Mawlamyine together with a private rubber growers’ associations, the agricultural department and trade promotion department of the commerce ministry. We hope the government will be able to take a lead role in upgrading the quality of our rubber,” U Kyi Soe told The Irrawaddy.

Until 2005, the rubber market, including exports, was managed by Myanmar Perennial Crop Enterprise, which adjusted the rubber prices according to the global market.

After the rubber market was privatized in 2005, the industry gradually declined due to reliance on China.

More than 90 percent of total rubber production of Mon State is produced as raw rubber, said the minister.

The state government has suggested to the Mon State Rubber Growers Association that it would partially fund a high-grade rubber processing plant in the state, but there are difficulties for small-scale farmers, said Nai Kyan Yit, chairman of the association.

“Individual rubber growers who operate less than 20 acres are not able to produce internationally marketable RSS-rubber because it takes at least a month to produce such quality. Small growers can’t wait that long, so it is impossible,” said Nai Kyan Yit.

He said small-scale growers could work together to establish a high-grade rubber processing plant, but it would be hard for them to fund it.

On Aug. 1, the Mon State government organized a two-day workshop on the production of high-grade rubber, and asked rubber growers to carefully get rid of dust, sand, and stones in rubber, and use formic acid instead of sulphuric acid for coagulation.

Rubber is one of the five sectors prioritized for development by the Mon State government to help improve the state’s economic performance.