Market and product

Ko Htwe Nyein Aung, the owner of Sein Sein rubber shop in South Okkalapa township, said domestic rubber demand had fallen by 50 percent on last year and that had pushed prices downward.

He said the best quality rubber, Ribbed Smoked Sheet 1 (RSS-1), was selling for about K1650 a pound (0.4536 kilograms) in late July, about 15pc lower than in March, when it was worth K1950.

In the same period lower quality RSS-3 and RSS-5 have recorded similar falls – from K1700 to K1550 and K1600 to K1450 respectively.

“We can’t harvest latex until August because of the monsoon, so we stop exporting rubber and turn to the local market. Normally, shoe factories are out major buyers and in 2010 I was selling large amounts of RSS-5 to shoe factories. But this year I’m only selling half as much,” Ko Htwe Nyein Aung said.

U Mya Thaung, a rubber exporter based in Yangon, confirmed that domestic rubber prices have been falling since early 2011 as a result of the declining value of the US dollar against the kyat.

Daw Malar, the owner of Toe Nayar shoe factory, said demand for locally made shoes had also fallen in 2011, which meant she was buying less rubber.

“I bought 500 pounds of rubber in 2010 to make shoes but I’ve only bought 300 pounds in 2011.

“There are not many buyers for my shoes this year and I have almost stopped production. The problem is that shoes imported from China or Thailand are fashionable and cheap, so people buy them instead,” she said.

U Khine Myint, general secretary of the Myanmar Rubber Planters and Producers Association, said unstable exchange rates were hurting rubber exporters.

“The weak exchange value of the US dollar has reduced exports and export earnings for rubber and many other commodities.

“In the first week of March, export credits were worth K900 but are only worth K792,” he said.