MALAYSIAN RUBBER INDUSTRY - REVIVAL

MALAYSIA TODAY ranking seventh globally in natural rubber production in 2020 and recorded a total production of 469.7 thousand tonnes in 2021 a decrease of 8.7% from the previous year. Before reported the planted area for natural rubber in Malaysia reached around 1.14 million hectare about the same area as the previous year in 2023. The nation's Natural Rubber production has faced a declining trend with an average annual growth rate of -6.9% from 2015 to 2021 as reported. However recently the Plantation and Commodities Minister has underscored the urgent need to revive Malaysia's natural rubber industry. His visit comes at a critical juncture as our Malaysia known as once the world's leading exporter of natural rubber but now finds itself among the largest importers of the commodity. The focused on rediscovering abandoned rubber plantations, increasing production, enhancing the downstream industry, and positioning Malaysia as a leading exporter once again. Malaysia still imports one (1) million tonnes of natural rubber worth RM6 billion annually for downstream industries. Presently reported that the country only produces around 380,000 metric tonnes of rubber. There are still 420,000 hectares of abandoned rubber plantations. If these can be worked on he urged it will reduce Malaysian dependency on imports. This article in "Anim Agriculture Technology" blog I share an information about the revival of rubber industry in Malaysia.

In other statement the minister told reporter that 'Malaysia must be a leading rubber producer again' as he said Malaysia must become one of the world’s leading producers of sustainable natural rubber again. He stated that Malaysia were once the world's largest rubber producer, generating 1 million tonnes of rubber after launching the Malaysian Sustainable Natural Rubber (MSNR) guidelines. Today however the production has now dropped to just 380,000 tonnes and asa aresult the country has to import rubber, amounting to RM6 billion to meet domestic demand. Reported that over the years the other countries including Thailand, Indonesia and Vietnam have overtaken Malaysia as rubber producers. For the record that Malaysia's rubber exports to global markets last year totaled over RM37 billion, with RM3.2 billion destined for the European market. He tolg media that Malaysia could emerge as a leading rubber producer again if it optimised 1.1 million hectares of rubber plantations nationwide as there were idle plantations. The Malaysian Rubber Board (MRB) urged to engage rubber smallholders and plantation owners who have abandoned their estates to resume tapping operations. When we ask them (to resume operations), they cite reasons such as being too old to tap, high maintenance costs, and low rubber prices. He said the ministry, along with MRB and the Rubber Industry Smallholders Development Authority (Risda), will explore ways to reactivate the idle plantations with the consent of the landowners. If they agree to cooperate with us, we will hire workers to tap the rubber trees on their land to boost production, and they will receive a portion of the profits to increase production would help the country cut down on importing natural rubber. One of the main global issues facing the rubber industry is the lack of traceability in raw materials. Currently Malaysia's rubber products hold a 16 per cent market share in the EU, valued at RM3.235 billion.

In other issues reported that Malaysia's natural rubber industry lacking in sustainability are identified. Malaysia is the world’s seventh largest producer and eighth largest consumer of natural rubber in the world. Rubber products in Malaysia are broadly used for three sectors, namely tyres, industrial custom rubber products, and consumables such as gloves and shoes. There are reports released yesterday stated that there's still a lack of sustainability and traceability in the natural rubber industry in Malaysia. The reports, entitled "Mapping the Natural Rubber Value Chain in Malaysia" and "Addendum Report on Rubberwood", found that the problem pertaining to the supply chain of natural rubber lies in the systemic structures of the production system. Malaysia is the world's seventh largest producer and eighth largest consumer of natural rubber in the world. Rubber products in Malaysia are broadly used for three sectors, namely tyres, industrial custom rubber products, and consumables such as gloves and shoes. Malaysia is a major importer of natural rubber from Thailand, as most Malaysian-grown natural rubber goes to tyre applications. The rubber sector is the second largest agricultural sector in Malaysia behind the oil palm sector, and has a significant impact on the environment. For the rubberwood sector, around 90 to 95 per cent of rubberwood goes towards the furniture segment in Malaysia. This segment accounts for 70 to 75 per cent of the rubberwood sector's RM8 to RM9 billion per year of export value in recent years. Rubber production is dominated by smallholders, at 96 per cent, and is a crucial sector in providing job security. As an important commodity to the nation and the rural population, WWF conducted a study to understand the natural rubber value chain in the country. The study found two key issues pertaining to the natural rubber industry, being the lack of sustainability and lack of traceability. The sustainability challenges stem from the fact that the industry is dominated by smallholders. According to Dr Adrian Choo, lead for WWF-Malaysia's Sustainable Markets Programme: "The lack of proper transparency and traceability in the natural rubber industry is rooted in the production system, as it is dominated by smallholders. The incentives or lack thereof is a major influence on their attitudes towards the environment. This challenge is not unique to rubber, but to many other commodities in general. There is also minimal disclosure in public corporate and sustainability reports for natural rubber. While the processing stages are relatively straightforward, there are complex sustainability challenges at the subsequent value chain stages. The reports found that market instruments, such as certification and premium, are important in mainstreaming sustainability in the natural rubber landscapes. However, key factors such as the synergy between sustainability platforms, smallholder equity, commitment and corresponding practices by major natural rubber buyers, and sustainable financing need to be present.  In terms of sustainability, some major Malaysian furniture companies indicate the usage of Forest Stewardship Council (FSC) Controlled Wood and Programme for the Endorsement of Forest Certification (PEFC) certified wood, although the volumes used are not publicly disclosed. Currently, there is an increase of sustainability mechanisms for natural rubber sourcing, which include certification schemes, roundtables and supplier rating systems. The challenge is to create synergy between the various sustainability schemes to mainstream sustainable natural rubber. For the rubberwood sector, the prospects for sustainable rubberwood appear promising, as concerns on climate change point to an increased interest in wood, to reduce the usage of carbon-intensive steel and cement in the built environment. For instance, cemboards, or cement boards (particleboards made from the combination of cement and wood fibres) are one of the primary products from processing rubberwood. Nonetheless, interest in FSC and PEFC certifications are challenged by the smallholder-dominated rubberwood landscape, and the lack of interest from seasoned stakeholders. Financial support, incentives and group organisation are required to encourage the certification of rubber plantations, particularly by the younger generation of smallholders. The lack of transparency and traceability impedes the sustainability of the natural rubber sector in Malaysia, and they must be addressed. Fundamental restructuring of the marketing system that will enhance greater financial returns to smallholders is also badly needed. Unless smallholders are incentivised to produce rubber sustainably, it remains challenging to convince them to shift from their embracement of current revenue generation models. Financial incentive is the key. Thanks.

By,

M Anem,

Melaka,

Malaysia.

(October 2024).

Update article on January 2026.

HAPPY NEW YEAR 2026...