Rubber may be on the rebound in Mon State after Singapore signed a deal for 50,000 metric tons on Tuesday.
A business-matchmaking session and exhibition featuring local rubber planters and producers was held in Mawlamyine, the state capital on November 14. Singapore signed the memorandum of understanding following the event.
“[Singaporean] Hinthar Agri Company will buy 50,000 tons from rubber planters. Even if they can’t sell the rubber at once, the company will buy as much as it can get,” said Nai Kyan Yit, chair of the Mon State Rubber Planters and Producers Association.
The contract was inked at the Royal Hinthat Hotel following the expo.
Mon State is trying to boost its rubber exports even as the global prices for rubber have slumped, in some case with production costs exceed the export values.
Nevertheless, the Mon State government has plowed ahead with plans to reform and subsidize the industry.
“Since there are many rubber planters, their lives will only improve when the rubber industry develops and they gain better incomes,” U Aye Zan, the chief minister of Mon State, said during the November 14 exhibition. “This event is held for all rubber planters and producers to find the solution together.”
He added that Mon State has around 500,000 acres of rubber plantations, which produce about 100,000 tons of rubber every year.
The state has promised to boost state subsidized bank loans for rubber entrepreneurs in order expand production. In September, U Aye Zan outlined a cost-sharing agreement that would see private companies contribute K80 million and the government K120 million to build high-quality rubber factories. He has previously claimed that a K200-per-pound gap between the global rubber price and domestic rubber prices leads Myanmar to forfeit US$300 per-ton and US$30 million (40.7 billion kyats) per 100,000 tons.
Currently, rubber factories are being built in Kyaikmaraw and Paung townships, with future facilities planned for Thaton, Mudon, Thanbyuzayat, and Ye townships.