A total RM6.4 million has been approved to regulate the prices of rubber at the plantation level through the Malaysian Rubber Board (LGM)) to tackle the critical drop in rubber prices (Bernama).

Plantation Industries and Commodities Minister Datuk Seri Douglas Uggah Embas said rubber smallholders would get profits of between RM0.20 to RM0.30 a kilogramme by reducing middlemen because rubber would be traded at 64 smallholders cooperatives under the new mechanism.  “With this mechanism, LGM will fix the daily proposed/reference prices for the cooperatives so that the rubber will be sold at a higher price than that proposed.

“This mechanism is important as the prices of rubber have dropped to a critical level. In order to protect the welfare of smallholders, the cabinet on Friday has decided to implement the mechanism,” Unggah told a media conference after launching the Malaysian Rubber Board (Licensing and Permit) Regulations 2014 in Putrajaya, Monday.

He said buyers of rubber at the plantation level normally imposed a profit margin of 20 to 40 sen a kilogramme while processors of Standard Malaysian Rubber 20 free-on-board (FOB) imposed processing cost and margin on the purchase of ‘cuplumps’ from traders.  “This cost is between RM0.70/kg to RM0.90/kg. This causes the price of ‘cuplumps’ at the plantation received by smallholders to be at the price of SMR 20 FOB minus discount of an average of RM1.90 a kilogramme,” he added.