PETALING JAYA: Malaysia will restrict rubber exports amounting to 39,000 tonnes only if SMR20 prices dip below US$2.70 (RM8.30) per kg.

"As long as rubber prices trade above that level, there is no export restriction. As of now, the mechanism is not enforced," said Plantation Industry and Commodities Minister Tan Sri Bernard Dompok.

Yesterday, the Malaysian Rubber Board's physical price for tyre-grade SMR20 rose seven sen to RM9.32 per kg and latex-in-bulk gained 3.5 sen to RM6.45 per kg.

"Should SMR20 dip below US$2.70 per kg, the mechanism will come into force and the government will bear the holding costs," the minister said after officiating the opening of the International Rubber Technology and Economic Congress 2012, here, yesterday.

Dompok was elaborating on last week's high-powered ministerial meeting where Thailand, Indonesia and Malaysia - the world's top rubber-producers - agreed to collectively restrict 100,000 tonnes of rubber exports to stabilise falling prices.

Dompok said such a move is necessary because rubber tapping benefits 442,510 smallholders comprising more than a million family members in rural areas.

According to Malaysian Rubber Board data, the natural rubber industry raked in RM39.83 billion in foreign earnings last year. This figure made up six per cent of the country's total exports.

Three months ago, Malaysian Rubber Glove Manufacturers Association (Margma) appealed to the government to give tax breaks to glove makers who aggressively re-invest to automate production lines and develop more innovative gloves for use in the medical sector.

Last year, Margma members shipped out more than 100 billion pieces of rubber gloves to more than 180 countries, bringing in RM10 billion in exports. This makes up two-thirds of the global rubber glove market.

Margma president Lim Kwee Shyan, who was present at yesterday's congress, said the medical device industry is making a paradigm shift from being labour-intensive to that of a high technology.

"With the right support of a second round of tax holiday or investment tax allowance, the rubber-based medical devices industry can help boost the country's gross national income further," Lim added.

In response, Dompok said he will lend his support to their appeal for tax breaks from the International Trade and Industry Ministry.