SATURDAY, FEBRUARY 23, 2002
Malaysian rubber industry tapping out
REUTERS
BALING, Malaysia: Working deep in a Malaysian rubber plantation, 60-year-old Ahmad Othman goes from trunk to trunk, scoring diagonal grooves in the thin, scruffy trees which weep out small cupfuls of milky latex.
But his occupation as a rubber tapper, once an economic mainstay of the Southeast Asian peninsula, is fast losing its allure as sagging prices and global competition force more farmers to abandon their plantations.
Prices are barely up from 1999's 30-year troughs, a major factor behind Malaysia's slump to record low output last year and its increasing reliance on imports to feed downstream plants making condoms and other rubber items.
Ahmad, a rubber tapper since the age of 15 from Baling village in the northern state of Kedah, says he makes just 500 ringgit ($131) a month these days.
"It's not worth the while but I have no choice," he said. Ahmad's day starts at 4 a.m. and he takes about six hours to tap some 400 trees and collect the latex.
U.S. tyre giant Goodyear and other tyre makers consume about 70 percent of the world's natural rubber, grown mainly in Thailand, Indonesia and Malaysia.
Since 1999, rubber smallholders have abandoned about 300,000 hectares (741,000 acres) of the 1.4 million planted.
Rubber prices collapsed that year when crude oil prices hit 30-year lows, which in turn made oil-based synthetic rubber much cheaper than natural rubber.
Ironically, the drop in local production meant Malaysia is on the way to becoming one of the world's major rubber importers, buying more raw rubber than it produces.
But the government has said it will not abandon rubber growing due to its strategic importance and the relatively large number of rural communities still dependent on the commodity.
Rubber a strategic crop
"Rubber is still important because we have many manufacturing activities which use it as raw material," Deputy Prime Minister Abdullah Ahmad Badawi told Reuters.
Abdullah said the government would continue to support smallholders financially. Each of them gets up to 250 ringgit a month if their household income is below 230 ringgit.
He also said the government would discourage farmers with a holding of four hectares or more from quitting rubber to replant their land with the more lucrative oil palm.
British colonialists brought the rubber tree, Hevea Brasiliensis, to neighbouring Singapore in 1877 from Brazil, via London's Kew Gardens and Sri Lanka.
It was taken up quickly on the peninsula, then under British rule, after a massive upsurge in demand from the early 1890s and helped by suitable soils, ample land and favourable weather.
Rubber along with tin, used to make food cans, became the colony's leading exports, their roles so dominant that their prices became accepted measures of economic conditions in what was then Malaya.
Colonial authorities encouraged increased migration to provide labour -- mostly from southern India for rubber plantations and from China for the tin mines.
By the 1930s, Malaya produced half the world's rubber.
Tin mines and rubber plantations -- owned mainly by European companies and managed by Europeans -- transformed Malaya into Britain's richest colony.
Independence from Britain in 1957 brought gradual changes in ownership, with most foreign-held plantations transferred to Malaysian hands and many estates being turned into oil palm plantations or sold off to property developers.
Record low production
Last year, rubber production hit a record low of 545,872 tonnes, versus 615,222 in 2000 and more than a million in the early 1990s. Malaysia now accounts for about a fifth of the world's rubber, taking third spot behind Thailand and Indonesia.
Malaysia's Rubber Board has stepped up research to produce higher-yielding varieties, hoping to arrest the declining output and find new uses for rubber.
Last month, it unveiled Malaysia's first building able to withstand an earthquake with a force of seven on the Richter scale.
The most deadly earthquake in modern times reached a reading of 7.8 on the Richter scale and killed at least 240,000 in China when it struck in 1976.
The head of Malaysia's board, Abdul Hamid Syawal, said the building in Lahad Datu in eastern Sabah state was built using 28 seismic rubber bearings to isolate the foundation from earth tremors.
Such efforts may be too little too late for Ahmad, the rubber tapper, who is glad none of his four children will step into his shoes when he eventually retires.
"One is still in school and another has gone to university and became a teacher. I hope I can help build a better future for them," he says.
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