More than half of rubber plantations are abandoned

The lack of initiatives to encourage the replanting of rubber trees had contributed to the decline in rubber production


MORE than half of the country’s 1.08 million hectares of areas planted with rubber trees have been abandoned due to the low price of the commodity.

The latest official data showed that 661,080ha or 61% of the total 1.08 million hectares of areas planted with the commodity are untapped as owners struggled to get a decent return for their efforts.

An industry insider said smallholders who own 96% of the total areas planted with rubber trees, had fled the estate and sought more lucrative jobs.

The older owners — who comprise up to 60% of the smallholders — had abandoned the job due to old age.

“At the moment, half of the rubber plantations in Malaysia are not being tapped, including the immature areas, which is only around 5%. This is such a disadvantage for the industry,” the industry insider told The Malaysian Reserve (TMR).

The analyst said what is more alarming is the hectarage of untapped plantation has doubled from 37.8% in 2010.

Malaysia was once the world’s top rubber producer. But last year, the country had to import 1.01 million tonne of natural rubber, valued at US$1.3 billion (RM5.45 billion). Today, Malaysia is the third-largest importer of natural rubber in the world.

“Since 2017, we have been the world’s top three importing countries after China and the US whereas once we were the top rubber exporter,” said the analyst.

The industry expert claimed the lack of initiatives to encourage the replanting of rubber trees had contributed to the decline in rubber production and related activities.

“The rubber trees’ age is one of the factors why some of the rubber tappers had stopped working on their plantation as older trees age between 20 and 25 years tend to produce less latex compared to the younger trees.

“It has been proposed that the Rubber Industry Smallholders Development Authority assists the replanting activities for 40,000ha annually.

“However, only 20,000ha were replanted and this left most smallholders with old trees which produce less yield,” he said.

Last year, the government allocated RM50 million under the Rubber Production Incentive to protect smallholders from the drop of the commodity’s price. The scheme will be activated when the farm gate price fell below RM2.50 for every kg.

“Although the allocation is provided by the government, not all smallholders are aware of the financial aid and other assistance like the Monsoon Season Aid.

“Not all (rubber tappers) had registered to get the Rubber Transaction Authority Permit. This document is required to receive such aids. At the moment, about 450,000 smallholders have the permit,” he said.

Global rubber prices plunged last week after China’s largest trader, Chongqing General Trading Chemical Co Ltd, halted rubber trading after failing to honour the contracts with its business partners.

The suspension of the state-owned operation which accounts about a third of China’s rubber supply, pushed rubber prices across Asia lower. Local rubber price dropped to a low of RM5.16 per kg on Oct 4.

Rubber prices started to decline in the third quarter of 2019 when the Standard Malaysian Rubber 20 fell by 10% to RM5.59 per kg compared to the previous quarter. The drop was largely due to lower demands as the US and China trade tensions had impacted the use of the commodity.