Govt must intervene to revive rubber industry, says expert

Ex-Malaysian Rubber Glove Manufacturers Association chief Denis Low says the government should allocate more agricultural land for rubber tree cultivation.

The government should implement strategic measures aimed at rejuvenating the nation’s rubber industry, says Denis Low, the former president of the Malaysian Rubber Glove Manufacturers Association (Margma).

Low said both the federal and state governments should allocate additional agricultural land for rubber tree cultivation.

“Smallholders should be encouraged and given incentives to replant their rubber trees instead of allowing older trees to continue ageing and produce less latex,” he said.

Last month, the statistics department reported a 4.5% reduction in Malaysia’s natural rubber production, from 29,867 tonnes in June 2023 to 28,533 tonnes in July 2023.

Low said Malaysia became a major rubber glove producer due to its easy access to latex from its plantations and processing facilities, but this advantage had diminished over time.

“Today, Malaysia contributes just 15% of the supply, with Thailand and Vietnam making up the remaining 85%,” he added.

He also noted that roughly 65% of rubber gloves on the market were now manufactured using synthetic rubber, with the remaining 35% still made from natural rubber.

“However, this trend may change when more natural rubber gloves are needed to amplify the importance of ESG,” Low said.

ESG, which stands for environmental, social, and governance, refers to a set of criteria investors, businesses, and organisations use to evaluate the sustainability and ethical impact of an investment or business.

According to Low, the country’s severe shortage of rubber is driven by three main factors – the conversion of rubber plantations to other crops, an ageing smallholder population that provides 70% of the rubber supply, and consistently low rubber prices that results in lower income for rubber producers.

Economist Barjoyai Bardai of Universiti Tun Abdul Razak echoed Low, pointing out that a considerable portion of Malaysia’s rubber plantations had been transformed into more financially rewarding oil palm plantations.

“Malaysia currently possesses just 11,000ha of rubber tree plantations, a stark contrast to the extensive one million hectares allocated for oil palm cultivation.

“There is potential for Malaysia to reignite the rubber plantation sector, but this would necessitate the adoption of innovative technologies,” said Barjoyai.

Comparing Malaysia and Thailand, Barjoyai noted that Malaysia had previously attempted to establish a tapioca plantation to produce edible tableware from tapioca, allowing individuals to consume their utensils after using them during a meal.

“However, the attempt failed as a comprehensive feasibility study revealed Malaysia’s inability to compete with Thailand due to its superior agricultural technology, including fertilisers, land availability, and pricing competitiveness,” he said.

Barjoyai said Malaysia has ample available land and can consider diversifying its agricultural landscape by reintroducing rubber cultivation alongside its existing dominant oil palm plantations.

“Our heavy reliance on oil palm left us vulnerable when its market declined. Balancing this with a rubber plantation industry can provide a crucial backup during such downturns,” Barjoyai said.

Read more at Free Malaysia Today