Rubber exports jump as smugglers siphon off profits

Cheng Sokhorng | Publication date 18 January 2018 | 18:59 ICT

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A worker collects coagulated latex at a rubber plantation in Kampong Cham’s Memot district in 2014. Heng Chivoan

The total amount of rubber exported by Cambodia surged 30 percent last year, but widespread rubber smuggling on the Vietnamese border crippled potential profits from the booming industry.

Cambodia generated about $300 million in revenue by exporting nearly 189,000 tons of rubber last year, according to Pol Sopha, general director of the rubber department at the Ministry of Agriculture. The revenue boost was also helped by a 24 percent increase in the average price per ton, which was up to $1,586 last year, compared to $1,283 in 2016.

But while small-scale rubber farmers were able to sell their crops for a profit, the industry as a whole was crippled by massive smuggling operations that shipped much of the country’s rubber into Vietnam tax-free, according to Sopha.

“Now the price satisfies the family rubber farmers, but it doesn’t give a profit to the rubber industry,” he said yesterday. “We are trying to crack down on rubber smugglers…but they use the small gates at the border, which is difficult to control.”

Men Sopheak, vice president of rubber plantation operator Sopheak Nika Investment Group, blamed the smugglers for some recent closures and lack of profits for the bigger Cambodian rubber exporters.

“Most of the local exporters have been forced to shut down, since they could not compete with the rubber brokers who smuggle to the border without paying tax,” he said yesterday.

But those brokers were a boon for smaller rubber operations, often times paying farmers near the border a high price for their crops, according to Thy Sambo, president of the Tbong Khmum Family Rubber Association, which has 92 small-scale rubber farmers as members.

“From what we sold last year, we can say that it is fair enough for us if the price stays the same this year,” he said, adding that being close to the Vietnamese border meant higher prices from the rubber brokers. “We are not worried about our living.”