Plantation Industries and Commodities Minister Datuk Douglas Uggah Embas is optimistic that the increase in natural rubber prices over the last few months is pointing towards a recovery in the rubber industry.

 

"On Tuesday, the price of SMR 20 went up to RM7.40 per kg. So that is an encouraging trend and we hope the trend will continue because it is important for us that our rubber price remain sustainable. Over 90% of our rubber is produced by smallholders and to the smallholders, price is critical," Uggah said after the opening of the National Rubber Economic Conference 2013 here yesterday.

 

This year has been a challenging year for the rubber industry, with the weakening of natural rubber prices driven by a combination of macro-economic factors and the market fundamentals of demand and supply.

 

The price of SMR 20 fell by 29% within five months from a high of RM9.54 per kg on Feb 6, 2013 to RM6.76 per kg on July 16, 2013.

 

Uggah said total production for the first seven months of 2013 was 477,177 tonnes, registering a decline of 12% from the previous year. Exports of rubber however recorded an increase of 4.2% to reach 460,319 tonnes.

 

Last year unfavourable natural rubber price and poor weather conditions hindered rubber tapping activities, bringing natural rubber production down to 922,798 tonnes from 996,210 tonnes in 2011. Natural rubber exports were also reduced to 771,194 tonnes from 946,081 tonnes in the previous year.

 

In 2012, the rubber industry contributed RM36.4 billion in exports or over 5% to the overall national export earnings.

 

Rubber is Malaysia's second main commodity crop after oil palm.