INTRODUCTION

Cambodia’s economic growth relies on the industry, service, and agricultural sectors. Agriculture contributed significantly to Cambodia’s Gross Domestic Product (GDP), accounting for 31.10% and 22.20% in 2002 and 2022, respectively. Cambodia’s agricultural sector employs 2.6 million people (FAO, 2022;WB, 2024). Approximately 75% of Cambodians live in rural areas, primarily farmers whose incomes come from the agricultural sectors (WB, 2024), while the rubber sector contributed to around 6% of Cambodia’s agricultural sector in the last five years (MAFF, 2023).

Rubber is a long-term crop that produces latex and wood; the rubber industry is a main commodity contributing to the country’s economic growth (MAFF, 2024). The rubber plantation area has steadily increased over the last decades, consisting of agro-industry plantations and smallholder farmers. The plantation area increased from 55,582 hectares in 2002 to 404,578 hectares in 2022 with an annual growth rate of 11.13%. The agro-industry plantations accounted for 226,850 hectares (56%), while smallholder rubber farmers occupied 180,332 hectares (44%). This sector has created jobs for 143,000 people (GDR, 2024).

Cambodia has a tropical climate, and fertile soil provides ideal conditions for rubber tree cultivation (GDR, 2020). Rubber plantations are mainly located in the eastern and northeastern regions of Kampong Thom, Kratie, Kampong Cham, Tbong Khmum, and Ratanakiri Province (Lee et al., 2013;GDR, 2020).

To explore natural rubber’s potential and diversify Cambodia’s agricultural sector, the Royal Government of Cambodia (RGC) initiated a policy to promote the rubber industry by including the rubber commodity as a component of the government development strategy and revised regulations to lift the tax burden in order to attract rubber investors to boost natural rubber production and export to the global market (GDR, 2020). It is an optimistic goal. Cambodia’s natural rubber production has increased dramatically from 32,384 tons to 382,000 tons as dry rubber volume from 2002 to 2022.

Although there is a small proportion of rubber suppliers in the global market, Cambodia has become a key rubber producer globally, improving its ranking from 15th to 7th in 2022. Cambodia’s natural rubber exports have also generated substantial revenue from $28 million to $398 million from 2002 to 2022, respectively (Trade Map, 2024;GDR, 2024). Despite Cambodia’s improved production performance, Cambodia’s natural rubber is exported around two-thirds in total volume to Vietnam and Malaysia in primary form, which caused Cambodia to lose value- added and competitive advantage to the global market (Chhour, 2017; MoC, 2019;Diepart et al., 2023).

Cambodia still faces challenges compared to other ASEAN member countries, including Thailand, Indonesia, Malaysia, and Vietnam, which are the major global producers and exporters of rubber and are the world’s leading exporters of natural rubber in the region which have high benefits in the region (Pinitjitsamut, 2020). Additionally, as small country, Cambodia finds it challenging to compete with Thailand and Vietnam, due to their superior economic advantages and larger regional scale. Although Cambodia’s open economic policies have facilitated substantial economic growth and development, as demonstrated by the sustained increase in exports and imports over the last twenty years, Cambodia still confronts heightened competition from neighboring and other countries in the region, especially after joining the ASEAN Economic Economic Community in 2015 (Ngoy, 2022).

Empirical research has shown that comparative advantage explains how countries tend to export commodities with a relative competitive superiority compared to other countries in the globe, which leads to increased export competitiveness. Balasa (1965) proposed measuring competitiveness by utilizing the revealed comparative advantage (RCA) as an indicator. This measure assesses the strength of a country’s commodity competitiveness in the global market. RCA compared the proportion of commodity exports in a country’s total exports to the proportion of the same commodities in the world’s total exports. RCA index can broadly define and measure export competitiveness among countries and regions in various sectors, including agriculture, manufacturing and industry. The RCA index determines whether a commodity has strong or weak performance and offers a straightforward method for assessing a country’s trade policy (Startien and Remeikien, 2014). Besides RCA for trade measurement, Xia and Dewi (2022) applied the Trade Specialization Index (TSI) to measure a product’s status and developmental phases. Hence, TSI can also describe a country’s commodity production, determining whether it tends to be an exporter or an importer.

The empirical benefits of the RCA method include its simplicity in calculation and its ability to provide valuable evaluation and data regarding a nation’s competitiveness in a particular commodity or industry. However, its utility in RCA studies have proven to be limited. First, RCA measures are frequently ineffective when comparing a country’s productivity levels over time (French, 2017). Second, the RCA did not account for the evaluated trade distortion factors, such as tariffs, quotas, etc (Fertö and Hubbard, 2003). Third, the RCA index’s “asymmetric” property is its less significant efficiency (De Benedictis and Tamberi, 2004).

Despite Cambodia’s natural rubber’s potential as an export commodity, understanding its competitiveness is crucial for developing export policies and identifying areas for future improvement. However, little literature exists on Cambodia’s natural rubber exports. Additionally, when analyzing the competitiveness of Cambodia’s natural rubber trade, those studies chose only the Great Mekong Sub-region countries as the competitors for analysis (Hing and Thun, 2009;Saing, 2009;Lee et al., 2013).

Hing and Thun (2009) studied agricultural trade in the Great Mekong Sub-region, focusing on cassava and rubber. The results showed that Cambodia’s rubber industry had significant export potential due to its high potential for expanding its planted area, producing primary natural rubber products of comparable quality, and earning value added. However, the study found many challenges such as low productivity and critical marketing channels. Furthermore, the cost of exporting remains high, making it a critical challenge. Although Cambodia’s rubber sector has grown, it performs below that of major regional-producing countries.

Saing (2009) studied on Cambodian rubber sector export competitiveness with the Great Mekong Sub-region rubber supplier countries by using descriptive statistical analysis methods. The results showed that the Cambodian rubber industry production grew consecutively. However, Cambodia’s rubber export competitiveness was weak compared to neighboring countries in the region. Cambodia’s rubber industry faced many challenges, such as low productivity, high production costs, low-quality products, and high transportation costs. Furthermore, a significant rise in the daily wage was one factor obstructing Cambodia’s improvement in competitiveness. At the same time, high electricity and petroleum costs relative to those of Thailand, Lao PDR, and Vietnam continue to weaken Cambodia’s rubber industry’s competitiveness.

Lee et al. (2013) researched Cambodia’s rubber industry situation. The study revealed that Cambodia’s natural rubber industry had potential for growth due to possible plantation expansion and local labor. However, it faced challenges in the cultivation, marketing and export systems. Cambodia’s natural rubber industry requires improved technology and investment needed for future development. Additionally, Khun et al. (2008) studied on rubber wood, while Piseth et al. (2021) investigated on rubber production and Diepart et al. (2023) identified the value chain of smallholder rubber in Cambodia. However, empirical studies have not examined Cambodia’s natural rubber export potential to its main export destination countries. The Cambodian natural rubber sector has emerged as a critical contributor to economic growth and progress. Therefore, this article bridges this gap and tackles the competitiveness issues in exports, a crucial step towards ensuring Cambodian natural rubber’s sustainability and responsible expansion. This study aims to identify factors that hinder Cambodia’s rubber industry’s competitiveness and examine ways to improve Cambodia’s natural rubber export competitiveness.

CURRENT STATUS OF NATURAL RUBBER PRODUCTION AND EXPORT IN CAMBODIA

Cambodia’s Natural Rubber Industry

Cambodia’s rubber plantations established in the early 1910s in the Prey Nop District of Kampot Province, located in the southern region of Cambodia. Rubber is an agro-industrial crop that produces latex and wood at the end of its life cycle (Khun et al., 2008).

The rubber plantations increased rapidly from 2009 to 2016 as rubber prices continued to surge, stimulating the expansion of cultivated land for smallholder farmers, private companies, and former state-owned plantations to meet high market demand and high profitability. According to the result shown in Figure 1 shows that Cambodia’s natural rubber production increased gradually from 32,384 tons to 382,000 tons from 2002 to 2022, with an annual growth rate of 13.80%. The productivity was 881kg/ha in 2002, it reached 1,212kg/ha in 2022 as an annual increase of approximately 1.73%. The mature tapping stage of rubber growth has significantly increased productivity, resulting in yields comparable to rubber planted in 2009. However, Cambodia’s natural rubber productivity is still relatively low compared to Malaysia was 1,339 kg/ha and Vietnam was 1,840 kg/ha (ANRPC, 2024;GDR, 2024).

The global rubber price has influenced Cambodia’s natural rubber, fluctuating from $639 to $1,440 from 2002 to 2022, respectively, with an average of $1,771 per metric ton with a growth rate of 8.86% per year. However, it has dropped gradually since 2017. Notably, the price boomed at $4,293 per metric ton in 2011.

However, due to the unpredictable economic situation, Cambodian smallholder rubber producers and investors could still benefit from favorable market conditions due to the increasing demand for natural rubber and stable harvesting. This situation resulted in lower profits due to high production costs, a shortage of capital investment and competitive latex sourcing caused by primary natural rubber export. Consequently, Cambodia’s natural rubber requires assistance and support from relevant stakeholders from the production stage to the final export.

Cambodia’s natural rubber local processing status

Cambodia had 154 handicrafts and factories processing natural rubber and rubber wood. There are 11 processing plants located in main rubber producing provinces namely Tbong Khmum, Kampong Cham, Ratanakkiri, Kratie, Kampong Thom, Mondulkiri, Preah Vihear, Stung Treng, and Oddar Meanchey. There were 46 TSR (technically specified rubber) processing factories that could make an average of 201,600 tons of rubber per year, one concentrated latex processing factory that could make 6,000 tons of rubber per year, 96 RSS (ribbed smoked sheet and air dried sheet) handicrafts factories produced 38,176 tons of rubber per year, and 11 rubber wood processing factories could turn 40,110 cubic meters of round wood into primary processing products per year in 2019 (GDR, 2022). Nonetheless, Cambodia’s natural rubber sector has encountered difficulties, including facilities functioning at 50 to 80% of their primary processing capacity due to inadequate rubber supply, except former state-run factories with plantation-sourced latex for processing. The poor value chain connections in sourcing natural rubber primary sources between smallholder farmers, rubber processing manufacturers, and local handicrafts.

In Cambodia, the primary processing costs amount to $125 to $150 per ton, which is higher than in neighboring countries (Saing, 2009;Hing and Thun, 2009;MoC, 2019;GDR, 2023) while transportation costs are also high spent up to $25 per ton required to reach the border and an additional $45 onwards to Ho Chi Minh City, Vietnam (MoC, 2019). This evidence indicates that the processing status still requires improvement, necessitating support from relevant agencies to improve it. There is still room for growth in this sector to attract foreign investors and process natural rubber into the final export product.

Cambodia’s natural Rubber Export

Cambodia’s natural rubber exports had increased from 5 to 16 countries by 2022, respectively. However, Cambodia’s main trade destination countries are Vietnam, Malaysia, Singapore, China, and Spain, while the remaining countries import low volumes. Cambodia has dramatically expanded its international trade, especially in the last five years. This result indicates export diversification, improved trade agreement performance, and global market adaptation. The increase in the number of trading partners demonstrates the improvement of Cambodia’s ability to trade globally. Cambodia has shown economic progress compared to the last two decades, which experienced limited growth. Cambodia exported 44,335 metric tons of natural rubber in 2002, while its export volume increased to 276,711 metric tons by 2022, respectively, with an average annual growth rate of 15.44%. Cambodia’s natural rubber exports also increased from $28 million to $398 million from 2002 to 2022, with an average growth rate of 18.75% annually. However, Cambodia’s share contributed about 2.70% of the world’s natural rubber production, ranking 7th among rubber producer countries, and accounted for about 2.50% of the global market in 2022, with an average growth of 5.40% annually (Sowcharoensuk, 2021;Trade Map, 2024). Cambodia had a low impact on global rubber production. However, it still faces many challenges: the high cost of agricultural input for plantation, limited technical production and new technology in production, long-term investment return, low productivity, processing capacities, price fluctuation and unforeseen economic circumstances on the rubber sector in the future.

The result in Table 1 shows that Cambodia’s natural rubber exports rely on a few main importing countries, especially Vietnam, followed by Malaysia. The other destination countries imported small quantities of natural rubber from Cambodia. Therefore, Vietnam received Cambodia’s natural rubber (HS4001) and its primary and semi-processed products. There were several reasons, including Vietnamese traders buying low-grade natural rubber and any primary forms for processing purposes and re-exporting the final products to other destination countries. Although Vietnam’s market price was slightly lower compared to Malaysia and Singapore, local traders decided to sell natural rubber to Vietnamese traders to reduce the high cost of transportation because Cambodia shares a border with Vietnam, which results in lower transportation costs. Moreover, local traders have convenient payment options at buying and selling points without fully recorded transactions. Saing (2009) and Diepart et al. (2023) emphasized similar discrepancies for rubber products exported to Vietnam along the border gates. Piseth et al. (2021) identified an issue regarding rice exported to Vietnam with no proper record statistics at detour border gates.

The inadequate recording of the total export volume led to an underestimation of Cambodia’s natural rubber export statistics. However, the trend consistently increased rubber production volume, resulting in long-term optimization of the agro-industry sector’s efficiency. Cambodia’s natural rubber development can be done with locally available inputs and labor. Rubber crop take a long period to break even compared to other agro-industy commodities and, it also requires high-cost investment in the plantation, however Cambodia’s natural rubber still has the potential for development and growth in the future (Siang, 2019; Hing and Thun, 2009; Chhour, 2017; MoC, 2019). Vietnam is the highest importer, with a value of about $300 million in 2022 compared to around $19 million in 2002. Malaysia is the second most unstable importing country, with fluctuating global market demand from 2003 to 2011. Malaysia increased its export value by around $20 million and has been the leading importer since 2011. Singapore imported natural rubber from Cambodia for about $3 million. However, the global impact from 2009 to 2018 saw the import value peak at $18 million. China was the main competitor buying natural rubber from Cambodia between 2008 and 2015. The natural rubber price increased, especially in 2011, to $39 million, reaching $76 million in 2014. China emerged as a leading importer of natural rubber due to industry growth. Due to the distance, Spain imported low volumes from Cambodia, valued below $5 million. Chhuor (2017);Sattayawaksakul and Choi (2017) found that Vietnam was the main importer, followed by Malaysia. These countries had adequate facilities and advanced technologies for processing natural rubber and exported the final product through a global partner network. Piseth et al. (2021) found that Cambodia exported primary agricultural commodities to other countries, which impacted Cambodia’s agricultural value added. MAFF (2023) revealed that local demand for natural rubber was about 30,000 tons in 2022. Cambodia also had small and medium rubber processing manufactories operating across the country. However, the business operation faced difficulty with competitively high production costs, including gasoline, electricity, labor, and transportation, which were still significant constraints for local natural rubber processing enterprises (Saing, 2009;Hing and Thun, 2009;MoC, 2019). This result aligned with the findings by Piseth et al. (2021) that Cambodia’s agricultural products had high production costs, which could impact the competitive advantage for exports. Similarly to Baidoo et al. (2024), cocoa farmers faced high production costs and limited technical resources, which could impact productivity and profitability.

Cambodia’s natural rubber has continually increased, demonstrating the improvement of mature production and export performance. Despite the consecutive growth in natural rubber production, the country relies heavily on exports, which still have low processing at the local level.

Based on the results in Table 2, Vietnam is the dominant importer, with a 2.89% annual growth rate, reaching a 65.95% average share. In 2002, Cambodia’s export share to Vietnam was 68%, increasing steadily until 2011, then declining to 58% and dropping to 30% in 2014. It went up steadily to 75% in 2022. In contrast, Malaysia’s share had increased from 19.80% in 2002 to 4.10% in 2022. In 2015, Malaysia started to increase to 26%. However, Malaysia declined again until 2022 to 4.10%. Noticeably, from 2011 to 2014, China overtook Vietnam and Malaysia as Cambodia’s primary rubber trade partner, with China’s share rising from 20.90% to 34% between 2016 and the present. During that time, price competitiveness and free market surges caused Cambodia’s natural rubber (HS4001) to increase its export volume to China. The other countries’ share gradually increased from 0.80% to 12.10% between 2002 and 2022, with a 12.42% annual growth rate. China boosted its importing volume to fulfill the needs which relied heavily on leading rubber producer countries in Southeast Asia, including Cambodia.

Sattayawaksakul and Choi (2017) and Sowcharoensuk (2021) revealed that Chinese investors significantly funded the development of rubber plantations in Myanmar, Lao PDR, and Cambodia between 2006 and 2012. For China, the availability of goods and resources increased consistently. Moreover, China increased its production of rubber goods, improving its negotiating power in global markets compared to natural rubber suppliers. Similarly, Vietnam and Malaysia remain import countries because their export volumes were lower than their import volumes, indicating a high local demand in the last five years (Trade Map, 2024).

MATERIALS AND METHODS

In this study, Cambodia’s natural rubber (HS4001) obtained by using quantitative methods and secondary data from a time series from 2002 to 2022. This study obtained data from the Directorate General of Rubber (GDR), Trade Map, and previous literature. It also included annual reports from the Ministry of Agriculture, Forestry, and Fisheries (MAFF) of Cambodia. Cambodia’s natural rubber (HS4001) exports to the main destination countries are Vietnam, Malaysia, Singapore, China, and Spain based on volume and export value.

Revealed Comparative A dvantage (RCA) Indices

This study used descriptive analysis of the Revealed Comparative Advantage (RCA) and the Trade Specialization Indices (TSI) to analyze the competitive advantage (Balassa, 1965).

where:

When the RCA indices exceed 1, i-commodities have a comparative and specialized advantage. If the RCA indices are less than 1, i commodities exhibit a comparative disadvantage and possess a lower degree of specialization (Pascucci, 2018).

Trade Specialization Analysis Indices (TSI)

The following criteria classify a country as an exporter or an importer: 1) If the TSI value is positive and ranges between 0 and 1, then the country tends to be an exporter of natural rubber if the TSI value is negative and ranges from 0 to −1, which the country tends to be an importer of natural rubber (Xia and Dewi, 2022;Fidhayanti et al., 2024).

The TSI analysis formaula is below:

where:

There are five stages of TSI. TSI indices value ranging from approximately -1.00 to -0.50 (Introduction Stage), from − 0.051 to 0.00 (Import Substitution Stage), from 0.01 to 0.80 (Growth Stage), from 0.81 and 1.00 (Maturity Stage), while the exporting country has a backward position from 1.00 to 0.00, it will be moved to (Step back to import country) (Xia and Dewi, 2022;Fidhayanti et al., 2024).

RESULT AND DISCUSSION

The results in Table 3 show the diverse exports of Cambodia’s natural rubber (HS4001) to numerous countries. However, five countries imported huge volumes, including Vietnam, Malaysia, Singapore, China, and Spain. The other countries imported low volumes.

The major exporters of natural rubber products were processing companies that sell independently, typically to brokers in Singapore or Malaysia. Overseas affiliates typically sell their commodities to consolidated corporations in Vietnam and China. Additionally, the company conducted large-scale rubber exports to China and Malaysia through Vietnam. Cambodia’s rubber export volume was insufficient to facilitate direct export to major tire manufacturers due to traceability and quality certificate requirements. These issues hindered Cambodia’s natural rubber potential from reaching the global market. Moreover, this sector faced other constraints such as high agricultural input costs, limited financing, cash flow issues among producers and processors, relatively low productivity, extensive export paperwork, and trade facilitation challenges during export.

Cambodia’s natural rubber RCA

According to the results in Table 4, the analysis shows that RCA’s value in the global market was 18 overall, which indicates that Cambodia’s natural rubber exports could be considered a strong comparative advantage. Cambodia’s natural rubber had a competitive advantage. The three main destination countries are Vietnam, Malaysia, and China.

Cambodia’s RCA was highest in Vietnam at 11.44, followed by Malaysia at 2.40 and China at 1.70. Conversely, Singapore had 0.79 and Spain 0.12. Cambodia’s RCA in Vietnam was in the first position. In these two decades, the RCA value ranged from 4 to 22, which was greater than 1. Therefore, it has a strong competitive advantage. Notably, the RCA value dropped gradually from 2008 to 2014 and increased until 2022. In 2002, RCA was 14.65; the numbers dropped steadily, hitting the lowest point of 4.80 in 2010, while there was an increase in China importing Cambodia’s natural rubber. The Vietnam market experienced a recovery and stabilization period, with values fluctuating between 6 and 8. It rose sharply, reaching 21.96 in 2021 and 22.42 in 2022, indicating substantial growth and recovery.

The RCA is greater than 1 and continues to show a growing trend, suggesting that Cambodia’s natural rubber will maintain a more substantial comparative advantage in natural rubber commodities.

Cambodia’s RCA in Malaysia had variable patterns up and down. From 2002 to 2009, RCA revealed consistently low values, around 0.42 to 4.28. The lowest RCA was in 2008 and 2009, at 0.42 and 0.87, respectively. From 2011 to 2016, the growth period RCA peaked at 6.19 in 2015, indicating a period of economic or industrial expansion. After 2017, there has been a declining trend, with a significant drop to 1.21 in 2022.

Cambodia’s RCA in Singapore had relatively low and stable values throughout the years, with minor fluctuations. The values mostly remained below 2, indicating minimally significant changes. RCA revealed minor fluctuations with values oscillating between 0.07 and 1.75 without significant upward or downward trends from 2011 to 2022. The consistently low values suggest Singapore has a stable, though possibly stagnant, import market for natural rubber from Cambodia. The slight increases and decreases may be due to minor policy changes or economic adjustments. However, no significant shifts are evident.

Cambodia’s RCA in China showed sharp variations, notable peaks, and several years of minimal activity. From 2010 to 2014, there was a significant growth phase with sharp peaks in 2013 (8.39) and 2014 (7.95), while from 2015 to 2022, the RCA stabilized around 1 to 3. The sharp increase in 2010 could be due to major infrastructural projects, resource discoveries, and other economic stimulation. The stabilization in subsequent years implies that a period of consolidation followed the initial growth phase.

Cambodia’s RCA in Spain had low values throughout the period, indicating minimal activity or growth in the future. From 2009 to 2022, there were minor increases, peaking at 0.39 in 2015. However, the RCA stayed low overall value. The low and stable values suggest Cambodia had a limited comparative advantage in natural rubber commodities in Spain. Cambodia generally has less gain compared to the established trend, which is lower than 1 due to the far destination and low volume imported from Cambodia.

Cambodia’s TSI compared to main destination countries

Table 5 indicates that the TSI compares Cambodia and its main destination countries. The results indicated that Cambodia was in the top position with an average TSI value of 0.99. Cambodia’s TSI was positive (0.81), indicating that Cambodia is in the maturity stage. This result was consistent with the increasing planted area, tapping quantity, and value of exports, all of which continue to increase in good performance annually. However, Cambodia is producing well and has development potential. Cambodia primarily exports semi-processed products, resulting in low opportunities in the international market due to its reliance on importing trade partner countries, particularly Vietnam and Malaysia, the leading destination countries.

Vietnam was in second place, with an average TSI value of 0.59. Vietnam’s average TSI value was positive (0.1<TSI<0.80), which indicated that Vietnam was in the Growth Stage. At this growth stage, Vietnam had a strong position as either an importer or an exporter country. Vietnam imported natural rubber from Cambodia, Lao PDR, Thailand, and Côte d’Ivoire; the resulting volume was more significant than the export volume, excluding its local production volume (Fidhayanti et al., 2024). Vietnam has a high local consumption volume. According to Trade Map (2024) data, Vietnam exported 671,620 tons of natural rubber in 2022, while Vietnam imported 859,709 tons.

Malaysia was in third place, with an average TSI value of 0.10. The TSI value (0.01<TSI<0.8) indicated the Growth Stage; however, it is a low value close to the Import Substitution Stage. From 2013 to 2022, the TSI value was negative each year. Malaysia’s TSI has a low value because the volume of rubber exports is lower than that of natural rubber imports. According to Trade Map (2024), Malaysia’s rubber export volume was 1,046,908 tons, while Malaysia’s average rubber import volume was 1,648,671 tons in 2022.

Sattayawaksakul and Choi (2017) found that Vietnam and Malaysia were importers and exporters of natural rubber and exported final processing products based on the solid performance of these countries, which had adequate processing facilities, high technologies, and were widely favorable with global partners.

Singapore’s TSI value was 0.01, close to 0 in the range between the Import Substitution Stage and the Growth Stage. The negative value means Singapore imported rubber for local consumption or redistribution. The TSI value indicates that Singapore’s rubber imports are relatively low. Singapore has always been a natural rubber importer, and because it does not grow locally, it has the pricing power of an international rubber futures broker (Xinyi, 2023). Singapore exported 75,462 tons of natural rubber, while its imported volume was 79,236 tons in 2022 (Trade Map, 2024).

China’s TSI value was negative (-0.98). The TSI value was (−1<(− 0.98)<(− 0.5)), indicating that China was an importer country in the Introduction Stage. According to the development of China’s automotive industry, the demand for rubber has increased annually, and China has become the world’s largest consumer and importer of natural rubber. According to Trade Map (2024) and Xinyi (2023), the rapid development of China’s tire industry has led to an annual increase in natural rubber imports, resulting in a short supply. The gap between supply and demand grew, with the highest imports reaching 9 million tons in 2011 and dropping to 3.5 million tons in 2022.

Spain’s TSI value had -0.91, and it is a net importer of natural rubber, primarily from ASEAN-producing countries. According to Trade Map (2024), Spain imported 198,433 tons of natural rubber while exporting only 6,597 tons.

CONCLUSION AND SUGGESTION

Exporting natural rubber could generate revenue for Cambodia’s GDP. Cambodia’s natural rubber has grown at 11.13% per year. The harvest area accounted for 77% of the total plantation, with the immature area at 27%. Cambodia’s natural rubber production increased gradually, with an average annual growth rate of 13.80%. Cambodia’s natural rubber production increased by 11.13% annually, while its average productivity was 1,092kg/ha, which is still low compared to other producing countries.

The price of natural rubber has fluctuated due to the global market’s demand and supply. Notably, in 2011, Cambodia’s natural rubber had reached $4,293. However, from 2016 to the present, it has dropped gradually. Cambodia has small and medium-sized natural rubber processing plants. However, due to inadequate rubber supply, local processing facilities only function at about half their capacity, except former state-run factories that used plantation-sourced latex for processing. Moreover, local processing has a high cost.

Cambodia’s natural rubber still needs to improve production cost, productivity, and local processing. Therefore, Cambodia’s natural rubber has revealed a competitive advantage due to RCA’s value in the global market being 18 overall, which indicates that Cambodia’s natural rubber exports could be considered a strong comparative advantage. The result also indicated that Cambodia’s natural rubber has an overall comparative advantage because RCA’s value exceeds 1. Vietnam, Malaysia, and China had the highest natural rubber RCA, with competitive advantages of 11.44, 2.40, and 1.70, while Singapore’s 0.79 had a limited comparative advantage, and Spain’s 0.12 had a comparative disadvantage.

Cambodia’s natural rubber is a limited destination due to its reliance on imports from Vietnam, accounting for 65% of its total exports. Cambodia is in the top position, with an average TSI value of 0.99 in the Maturity Stage. Vietnam was in second place, with an average TSI value of 0.59 in the Growth Stage. Malaysia was in third place, with an average TSI value of 0.10, indicating the Growth Stage. Vietnam and Malaysia were both countries that imported and exported natural rubber. Vietnam and Malaysia exported rubber processing products due to advanced technology and strong trading partnerships with global partners. Three destination countries including China, Singapore and Spain had a negative TSI.

Cambodia primarily exports natural rubber to major importing countries such as Vietnam and Malaysia, which also produce the most natural rubber in the region. China, Singapore, and Spain solely import natural rubber. Therefore, this indicates the importance of Cambodia’s role in the global natural rubber market and its potential to expand its exports because all main destination countries rely heavily on natural rubber for their local processing before either domestic consumption or exporting final products to their trade partners.

This research is a policy suggestion that the Royal Government of Cambodia should continue to support the natural rubber industry through enhancing research activities and providing technical support to smallholder rubber farmers and large-scale private companies engaged in rubber cultivation in Cambodia, which is essential to fostering the development of Cambodia’s natural rubber sector and ensuring compliance with global benchmarks. This support will ensure the sustainability of natural rubber production. Consequently, Cambodia should promote more investments in the natural rubber processing industry for primary products and enhance current processing capacity, which are essential steps to increase the value-added of natural rubber and reduce dependence on exporting primary product forms.

Despite Cambodia’s annual increase in plantations and production volume, the proportion of immature plantations remains stable at about one in four, while the number of old rubber trees with low productivity requiring cutting down is increasing. The relevant stakeholders in Cambodia’s natural rubber industry should maximize output and productivity by improving the production system, product quality control, and new technology support on rubber to maintain sustainable production. Although Cambodia has a highly competitive advantage, RCA is greater than 1 in three countries. TSI is higher as a mature export country with potential export to main destination countries; Cambodia should not rely solely on its main importing destinations, particularly Vietnam alone.

Cambodia should bolster its existing position by increasing volume in the remaining destination countries, despite their relatively small share, and continue to explore potential global markets to expand its exports in the future, opening opportunities for growth. The Royal Government of Cambodia (RGC) should assist local small and medium rubber processing manufactories and handicraft by providing financial support to fulfill operations and reduce production costs. The RGC should boost development by improving natural rubber processing efficiency for the local market prior to exporting to main destination countries. The RGC should also support market linkage and trade facilitation between Cambodia’s natural rubber traders and tire-automated factories in sourcing natural rubber for the processing industry.

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