SHAH ALAM, 29 Jan 2009: The Government will only impose a floor price for rubber, should the commodity fall below the cost of production.
In which case, Plantation Industries and Commodities Deputy Minister A Kohilan Pillay said, producers and consumers might suffer huge losses in the face of the current world economic slowdown.
He said the government would intervene to support rubber prices to ensure a reasonable rate of returns to producers and consumers, if the price of Standard Malaysian Rubber (SMR) 20 fell to a critical level of RM2 to RM2.50 a kilogramme.
“The price of SMR 20 is currently at RM5.07 a kilogramme and there is no need to set a floor price for rubber, at the moment.
“Small planters are not suffering losses from the current rubber price but if the commodity price falls below the cost of production, then my ministry will recommend to the cabinet to introduce the floor price mechanism,” Kohilan told Bernama when contacted today.
He said this when asked to comment on a call by Persatuan Kebangsaan Pekebun-Pekebun Kecil Malaysia (PKPKM) recently, asking the government to set a floor price for rubber to safeguard the interests of more than 250,000 small rubber planters in the country, due to the world rubber price drop.
PKPKM president Datuk Aliasak Ambia was reported to have said the time was ripe for government to consider setting a floor price for rubber since the income of many small rubber planters in rural areas was affected due to the commodity price drop.
Kohilan said, Malaysia, Thailand and Indonesia, the world’s biggest natural rubber exporters, had already cut down on rubber exports from this month to address dwindling prices of the commodity.
The deputy minister was reported to have said the three countries would reduce natural rubber exports by 270,000 tonnes under a scheme to reduce rubber exports.
Meanwhile, Kohilan, who is also Gerakan vice-president, advised small rubber planters to engage in sweet potato cultivation since many farmers were reaping huge profits in Kelantan and Terengganu. — Bernama