In a decisive move to regulate Liberia's rubber sector and ensure fair returns for producers, the Ministry of Agriculture, through the Liberia National Rubber Pricing Committee (LNRPC), has announced a new national buying price for rubber, effective June 1, 2025.
The new benchmark sets the buying price at $574.06 per ton of coagulum (cup lumps or slabs) delivered at the factory gate. After statutory deductions, rubber farmers will receive a guaranteed net price of $545.00 per ton.
The LNRPC, which is responsible for determining and publishing rubber prices each month, includes representatives from the Ministry of Finance and Development Planning, the Ministry of Commerce and Industry, the Ministry of Justice, the National Investment Commission, the Rubber Development Fund Incorporated (RDFI), and the Rubber Planters Association of Liberia (RPAL). The committee also includes rubber processors, represented by Firestone Liberia.
According to the pricing breakdown, the gross price of $574.06 includes a 4% Government of Liberia levy amounting to $22.96. Contributions to the RDFI and RPAL are $3.17 and $2.00 respectively, resulting in the net payout to farmers of $545.00 per ton.
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An official government document detailing the pricing formula reveals that each month's rubber price is based on the average daily price of rubber on the Singapore Commodity Exchange for each preceding month. From this benchmark, regulators then deduct production costs to reflect the 58% dry rubber content. They then apply a 10% profit margin for processors, leading to the final gross price.
According to the Ministry of Agriculture, the LNRPC subsequently announces the rubber price for the following month, based on this formula. Price notices are circulated to rubber processors and prominently displayed at rubber purchasing sites across the country to ensure transparency.
In a significant policy shift, the committee disclosed that it is seeking an Executive Order from President Joseph Boakai to impose a surcharge on unprocessed rubber exports. This proposed measure aims to protect and strengthen Liberia's domestic rubber processing industry by discouraging the export of raw rubber and encouraging value addition within the country.
The LNRPC also issued a stern warning to all rubber-buying entities: any attempt to purchase rubber below the mandated price will result in prosecution. The move underscores the government's intensified efforts to protect Liberian rubber farmers from exploitation and ensure equity in the market.
In the official notice, the Chairman of the Rubber Pricing Committee emphasized the importance of the initiative, noting that it is a critical step toward supporting farmers and revitalizing one of Liberia's most important agricultural exports.
"This pricing structure reflects our commitment to a transparent, fair, and farmer-centered rubber economy," the committee's leadership stated. "We urge all actors in the value chain to comply fully."
This intervention comes at a crucial time for Liberia's rubber sector, which has long served as a lifeline for rural communities. With global market conditions fluctuating, stakeholders believe the newly enforced pricing mechanism will stabilize farmer incomes, incentivize domestic production, and enhance competitiveness.
The Ministry of Agriculture reaffirmed its position by encouraging rubber farmers and buyers alike to respect the pricing guidelines and contribute to a more equitable, transparent, and sustainable rubber industry.
Firestone Liberia appears none too pleased with this development. In swift response to the price hikes, the concession issued a press statement announcing the temporary suspension of its rubber purchases from farmers across the country.
The National Rubber Pricing Committee ("Committee") "set a price higher than Firestone buying price," the statement said.
According to Firestone, the price set by the Committee is not based on any objective standard because rubber processors across Liberia operate under diverse conditions and some, including Firestone, "are bound by existing social obligations, including education, housing, medical, community development commitments, support for smallholder farmers, and infrastructure maintenance. Other countries with national pricing formulae, do not have these mandatory social responsibilities."
"These obligations impose significant incremental costs that a uniform pricing model does not consider. The price announced by the Committee today does not take into consideration the various factors stated above and therefore is not sustainable." The management said, "Under the Concession Agreement, Firestone is authorized to set its monthly price based on international market conditions which we have been doing and notifying the government through the Ministry of Agriculture."
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Firestone added, "We have been engaged with the Committee on this issue for over 6 months and will continue to work with the Committee to formulate a national price applicable to all processors and farmers to ensure a consistent and viable supply of rubber in the interest of the farmers, processors and brokers. We are committed to our smallholder farmers and remain hopeful that working together, a solution can be reached in the interest of all the parties involved." They further revealed that the company is the country's largest private employer.
Firestone is also the largest player in the market. Rubber is one of Liberia's major exports, accounting for an estimated 33.5 percent of export proceeds in 2024. And, in an average year, the company purchases over 60 million pounds of natural rubber from smallholder farmers, providing them with an income exceeding US$30 million.
Given this outsized impact, it remains to be seen whether Firestone will win this game of chicken with regulators. This is a developing story, and the Daily Observer will be monitoring the situation closely.
