Thai Rubber Output To Rise 10 Pct In 2011

Thai rubber output could rise by 10 percent in 2011 as trees planted a few years back during a government-sponsored expansion of the sector begin to produce latex, a Thai Rubber Association official said on Monday (Feb 21).
"Thai rubber production should rise to 3.3 million tonnes this year, up from around 3.0 million tonnes in 2010," said Reyong Kittipol, also vice-president of Thai Hua Rubber Public Co. Ltd, Thailand's biggest rubber producer.
Rubber trees planted in a first, 160,000 hectare (395,400 acre) expansion in 2004 should be mature and start producing latex this year, pushing up output, he said on the sidelines of a rubber meeting in the Cambodian town of Siem Reap.
The government has also promoted a second phase covering 128,000 hectares of land, starting from this year, as it expected farmers would seek to benefit from current high prices.
Tokyo rubber futures, which set global trends, hit a record high of 535.7 yen ($6.44) per kg on Feb. 18 because of supply concerns and hefty speculative buying by investment funds.
Output was expected to rise to 3.7 million tonnes in 2015, when all the new rubber trees planted during the first expansion should start to produce latex, Reyong said.
Thailand, the world's biggest rubber producer and exporter, was expected to export 2.9 million tonnes of rubber in 2011, up 7.4 percent from last year when it sold 2.7 million, Reyong said.
Soaring futures prices and tight seasonal supply in producing countries have also pushed physical prices to a record level, with the Thai benchmark offered at $6.40 per kg.
Reyong said rubber prices could average $5.0 per kg this year, up from $3.6 in 2010 as demand remained strong.
He said prices could ease in May when the dry season ends and farmers resume tapping, pushing up supply.
"But I don't expect to see any collapse in prices in May as those buyers who were reluctant to buy at record high prices are likely to come into the market to replenish stocks," he said.
(Reuters, February 21, 2011)