Recent News – April 2010

Tourist Boost in S’ville


The PPP reports a ‘sharp’ increase, namely 50% more international tourists over the Khmer New Year in Sihanoukville province. A (surprising) 650, yes you read it right - 650, international visitors came to the region (versus 410 in 2009), according to the director of the tourism department.

If that accounts for a boost I don’t know what they would call 1000 visitors – a deluge? This was over the New Year holidays. Who are they kidding? Did they count the expats from Phnom Penh, or what?

Before making such unreflected public comments this director had better learn how to compile real statistics.

Similarly, the 9% increase over 2009 isn’t what they make you believe. Most of that increase is derived from Vietnamese tourists coming for a 3 day visit; that’s how long they usually stay. Additionally, they are not known to be big spenders. In the end, the bottom line for the country is still more or less the same as in 2009 so far. I do know a small number of hotels, though, that are always booked solid. They are even expanding right now.

Rubber Prices

The same issue of the PPP says that rubber prices soared a whopping 236 per cent. This is, of course, true. As of the time of this writing one ton of crepe rubber traded at $3,729, and it looks like prices are going to continue climbing.

Ly Phalla, the director of government’s rubber directorate says he hopes that prices will keep on rising. That’s, however, a pretty short-sighted, if not outright amateurish, view.

One needs to look at the underlying reasons for these incredible increases. He cited the bad weather last year resulting in a decrease in production in 2009. That’s only part of the story. He must have forgotten that there was and still is an economic crisis going on in the world. Thailand, for one, deliberately decreased production on slow demand. Slow demand was the main factor for those plummeting prices to begin with.

The current rise is caused by the still breath-taking growth in China, which is leading directly into an overheating of especially the commodities market. Don’t forget, high natural rubber prices make synthetic rubber look much more attractive. So there is an inherent danger in that rubber price explosion. It will lead to higher prices for rubber based products, which in turn might lead directly to a slowing of demand again. So that spike is sure to come down again to more reasonable levels. Additionally, there is a ‘natural’ shortage at the end of the wintering season. The resumption of production is just starting now. Once it is in full swing again around June, July, prices should stabilize, if not come down. My bet, and my hope, is that prices will settle at the $3,000 mark. That’s high, to begin with. Why hope? I just think of the past bubbles; bursting bubbles always have a dramatic effect, and I just don’t like this kind of drama.