Cambodia earned $385 million from the exports of rubber and rubber articles in the first seven months of the year, recording an increase of 43 percent compared to the same period last year, showed the latest trade data of the General Department of Customs and Excise (GDCE). The growth in exports is significant as, for the first seven months of 2022 Cambodia earned only $269 million from the exports of rubber goods.
The latest data also showed that for July 2023 alone, Cambodia earned $61 million from rubber exports compared to $41 million earned for the same month last year, registering an increase of 48.1 percent year-on-year. But compared to the previous month (June 2023) this showed a slight decline as Cambodia earned $63.76 million from rubber exports last month.
The data, however, indicated that the rising trend in rubber exports from the country that started in the latter half of last year has continued into the January to July period this year as well. The surge in rubber exports this year is also remarkable as Cambodia's total exports showed a decline of 1.8 percent for the first seven months, mainly due to the slowdown in the exports of garments, footwear and travel (GFT) goods.
It may be noted that Cambodia earned $541.66 million from the export of rubber and rubber articles in 2022, recording a growth of 28.3 percent compared to the previous year. The Cambodian rubber market mainly consists of China, Vietnam, Malaysia, Singapore, India, and the EU. Meanwhile, in July 2023, the global production of natural rubber (NR) witnessed a 2.1 percent growth, amounting to nearly 1.3 million tonnes, while global demand for NR posted a relatively faster growth at 3.2 percent to 1.3 million tonnes year on year.
According to the monthly statistical report released by the Kuala Lumpur-based Association of Natural Rubber Producing Countries (ANRPC) on August 18, this growth, however, fell short of expectations. "The market's heightened sensitivity to cautious circumstances, combined with growing fears about China's economic slowdown, continuous Federal Reserve rate hikes, and geopolitical tensions, hindered this near-market-equilibrium development from driving the prospects of the NR market", the report said.
For July 2023, Thailand continued to be the biggest producer of natural rubber with an output of 400,000 tonnes followed by Indonesia, Vietnam, China, India, Malaysia and Cambodia. China continued to be the biggest consumer of natural rubber, followed by India, Thailand, Malaysia and Indonesia. Vietnam media recently reported that the country exported 757,600 tonnes of rubber worth over $1 billion to China in the first seven months of this year, accounting for 99.8 percent of its total rubber exports.
Vietnam is China's second-largest rubber supplier after Thailand. Vietnam's Ministry of Industry and Trade forecast that rubber exports to China will keep rising in the next few months due to a steady rise in demand. The report however said that the price of rubber in July was $1,291 a tonne, down by 17.9 percent year-on-year. In 2023, the global natural rubber market is anticipated to reach 14.693 million tonnes for production while consumption is projected at 14.738 million tonnes.
While the natural rubber market is weighed on by the fundamentals of the produce itself, other external factors such as inflationary pressures, geopolitical tensions and global crude oil market could play an influential role in the rubber market, including in the price of natural rubber.
"Stubborn inflation and a projected slowdown in the recovery of the global economy in 2023 are major concerns", said Heng Guan, Secretary-General of ANRPC in a report earlier this year. Adding to this are the impacts of the prolonged Russia-Ukraine war and high borrowing costs in many parts of the world due to interest rate hikes and tighter monetary control policies.