Cambodia rubber producers are faced with a sharp drop in prices for their product after a slump in the international rubber price during recent months, Agriculture Ministry officials and rubber plantation owner said Tuesday.

Ly Phalla, director-general of the Agriculture Ministry's rubber plantation department, said the price of rubber resin in Cambodia had almost halved during the past few months and is now at a two-year low.

He attributed that sharp drop in rubber prices to decline in demand on global markets, large stockpiles in China - the main end-market for Cambodian rubber - and a seasonal drop in demand from factories in the US.

Ly Phalla went on to say the recent lowering of crude oil prices is boosting the sales of synthetic rubber, which is made from petroleum, thereby lowering the cost of natural rubber.

"I hope and expect that rubber prices will go up again in January and February," Ly Phalla said, adding that US demand usually increases again in November.

Rubber plantation owners in Kompong Cham province said prices had started dropping in the past two month, falling from about $3,000 per ton of rubber in lat August and early September to $1,200 per ton earlier this month.

Mok Kimhong, director-general of Chup Rubber Plantation, said only in recent days had prices risen again slightly, bringing the resin price to $1,610 per ton Tuesday.

His company is keeping 700 tons of rubber in stock until prices rise to about $1,900 per ton, Mok Kimhong said, adding that they were forced to sell 200 tons at low prices in order to pay their workers.

Na Marady, director-general of Memot Plantation, said that in early October, Chinese and Vietnamese companies stopped buying his rubber resin and he had since stockpiled 200 to of resin. "We will sell our rubber resin when we have markets," he said. He added that he fears the price may yet drop below $1,000 per ton.

Source: The Cambodia Daily issued on 22 October 2008.