Rubber growers dismayed by reduced prices

The disappointment among rubber growers in Bangladesh is mounting as prices of latex and rubber sheet are declining despite being import substitutes for key materials used in various industries.

Rubber growers say the price of latex has fallen by Tk 10 per kilogramme (kg) while that of rubber sheet has reduced by Tk 30 per kg over the past six months.

Some 67,939 tonnes of latex were produced in the country last year, up 58 per cent from 43,000 tonnes in 2021, driven by an increase in the area under cultivation, according to the Bangladesh Rubber Board.

"The price of latex and rubber sheet declined in local markets as processors are taking advantage in the name of increased production costs," said Mohammad Kamal Uddin, a former president of the Bangladesh Rubber Garden Owners' Association (BRGOA).

Kamal also said the demand for all rubber products are increasing while rubber prices are declining.

"There is no scope to preserve latex and rubber sheet as they are perishable and so, processors are taking advantage by forcing gardens to sell raw rubber products at minimum prices," he added.

As per BRGOA data, the price of latex has decreased to Tk 50 per kg at present from Tk 60 over the past six months.

Similarly, the price of rubber sheet has reduced to Tk 140 per kg from Tk 170 during the same period.

The price of rubber sheet was as much as Tk 350 per kg three to four years ago.

The price of rubber sheet is not only declining in Bangladesh but also abroad due the ongoing global economic situation.

Rubber is currently being grown on 140,000 acres of land, mostly in the Chattogram region, with private operators running 1,304 gardens while state agencies operate another 28.

The size of the domestic raw rubber market is valued at around Tk 1,050 crore, Kamal said.

And although accurate data is unavailable, garden owners have collectively invested at least Tk 2,500 crore in the business, which creates around 150,000 opportunities for direct employment, he added.

Samir Datta Chakma, president of the Indigenous Rubber Garden Owners Association in Khagrachari, said marginalised rubber producers do not get reasonable prices as they cannot process latex.

"So, we get only Tk 40 to Tk 50 per kg of raw rubber collected from rubber plants," he added.

Chakma also said the production cost is increasing due to a labour cost hike in hilly areas as the price of essential products is in a rising trend.

Although rubber farming in the hilly district is getting popular as it requires low investment while providing a long-term return, the continuous increase in production cost has become challenging.

Meanwhile, production has declined by almost 50 per cent over the past three months due to the lack of rain, he added.

Chakma alleged that they have no access to finance for expanding their gardens.

"But demand will not decline as the use of rubber has grown in the country," he added.

For example, locally produced rubber accounts for at least 80 per cent of the ingredients needed to make sandals, said Arfanul Hoque, head of retail at the Bata Shoe Company (Bangladesh).

Meghna Group is one of the major users and exporters of rubber products in the country.

Meghna Innova Rubber Co Ltd, a concern of the group that exports bicycle tyres and tubes, uses 100 per cent locally produced rubber.

"We are purchasing latex at Tk 160 per kg and the price remained stable over the last six months," said Luthful Bari, director for operations at Meghna Group.

According to him, the stable price of local raw materials gives relief to manufacturers as their production cost does not increase.

Md Shahidul Islam, the immediate past chairman of the Bangladesh Forest Industries Development Corporation, said the price of latex has remained the same during the last one year.

The price has been between Tk 160 and Tk 170 per kg for the last six months, down from Tk 250 per kg two years ago, due to low demand during the Covid-19 pandemic.

Islam also said local prices did not increase as the overall international price of latex has not increased significantly.

Rubber exports fetched $46.82 million in the last fiscal year, the highest on record and up 37 per cent year-on-year, data from the Export Promotion Bureau shows.

However, earnings from rubber shipments declined 25.31 per cent to $32.7 million in the July-May period of the outgoing financial year. It was $43.78 million in the same period of last fiscal year.