Thailand To Implement Rubber Price Guarantees

Thailand‟s Natural Rubber Policy Committee has agreed to set minimum and
maximum prices for natural rubber as part of a range of measures intended to
stabilise the industry and prevent major fluctuations in price. The Bangkok Post
reported on July 22 that a task force chaired by the country‟s Agriculture and
Cooperative Ministry has been appointed to lay out these price guidelines within one
month.
According to the paper, deputy agriculture minister Supachai Phosu has described
the Thai government‟s short-term solution to recent fluctuations; the government is
said to have asked for cooperation from the Bank of Thailand to “support commercial
banks in lending to entrepreneurs who buy rubber and keep their stocks when the
rubber price is below 120 baht a kilogramme.” Rubber prices increased to 150 baht a
kilogramme last week from 80 baht and the trend will most likely continue due to the
dry season.
Supachai also said Thailand wishes to cooperate with Indonesia and Malaysia in
establishing a minimum price of 120 baht a kilogramme, while the maximum price
should not be, reports the Bangkok Post, so high that it drives users to synthetic
rubber. Apichart Jongsakul, director of the Office of Agricultural Economics, said the
production cost of rubber was about 40 baht a kilogramme, and therefore 120 baht
was the „appropriate‟ price. He added that the price drop late last week was caused
by unrest in Libya and the Middle East, the Japanese earthquake and tsunami, along
with recent high prices deterring purchases from entrepreneurs in China.
On March 16, Suthep Thaugsuban, Thailand‟s deputy prime minister and chairman
of the National Rubber Policy Committee, reported implementing a temporary stop
on rubber exports in response to declining prices; at the time he said the current
decline was not „in line‟ with the commodity‟s trading nature. “Rubber is one of the
country‟s major sources of foreign exchange and therefore the government must
give it special attention,” he said.
(Tyrepress.com, March 22, 2011)