LIGS refutes Warisan’s allegations

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KOTA KINABALU: The Sabah Rubber Industry Board (LIGS) today refuted Warisan Sabah’s allegation in the social media that the raw rubber cess imposed on raw unprocessed rubber taken out of the State is the cause of low rubber prices in Sabah.  As explained in LIGS’s previous press release, there is no export duty for processed rubber exported out of Sabah and smallholders do not pay this cess.  Abolishment of this tax will only benefit factories outside the State.

The lower farm gate prices of rubber in Sabah compared to Peninsula are due to logistical reasons and has nothing to do with the raw rubber cess.   The raw rubber cess is to ensure that all raw rubber are processed in the State and not sent to Peninsula Malaysia or Sarawak for processing to protect the local industry.  It is the policy of the government to process raw rubber in the state to produce value added SMR that can be exported to earn foreign exchange for the State as well as to provide employment to Sabahan rather than merely exporting the raw unprocessed rubber.

As stated before, the dry rubber content (DRC) of rubber is always determined by standard laboratory testing that is a recognized international standard and also by actual output achieved after processing of the raw rubber from the factory.  As LIGS buys weekly, this means smallholders sell their raw rubber which is one day to six days old.  The actual average DRC of unsmoked rubber sheets  in Sabah is only 55-65% and not 70-80% as claimed by Warisan Sabah while for cup-lumps, the actual DRC is only 48-60%

With efficient management and cost cutting measures LIGS has been able to build up sufficient revolving fund in order to assist the smallholders.-pr/BNN