InfoQuest, (June 04, 2019) -- Fresh latex has been seeing sustained price rise since January 2019, according to Mr. Yiam Tharoroit, acting director general of Rubber Authority of Thailand (RAT). The price rise can be ascribed to relevant government measures, especially those facilitating domestic use of rubber. One of such measures is the one km-for-one village rubber pavement project, which totals 300,000 kilometers nationwide. The project is designed to use around one million tons of fresh latex to help consume domestically produced latex, and build more public facilities. That is a key factor behind the rise of rubber price since early this year.
At this point, price of fresh latex in Thailand stands at about 50.00 baht/kilogram, higher than that in Indonesia. Another government measure is encouraging investment in Eastern Economic Corridor (EEC), which has attracted investors from the rubber industry. The increasing investment has facilitated more tyre manufacture plants, driving up demand which is reflected by subsequent price changes.
The prices of dry rubber (ribbed smoked sheet and cup lump) have also increased. That is because since last October, RAT has participated in ribbed smoked sheet auction in Songkhla, Nakhon Si Thammarat and Surat Thani. RAT purchased the product at proper price to direct market, and sold it to factories with demands. With more rubber being used in domestic deep processing, the amount of rubber in market decreased, driving the price of ribbed smoked sheet in rubber trading market from 40.00 baht/kilogram to 55.00 baht/kilogram. On May 31 (Friday), the export FOB price in Bangkok reached 60.00 baht/kg.
The government commissioned RAT to support rubber farmers in a sluggish market with a project valuing at 17 billion U.S. dollars. To be specific, each rai (about 1,600 square meters) is offered a subsidy of 1,800 baht, including 1,100 baht/rai for rubber farmers and 700 baht/rai for rubber tappers. The upper limit should not exceed 15 rai/person. Currently, over 90 percent of the subsidy has been paid. It is estimated that all subsidy will be paid by this June, earlier than original plan.
In order to solve problems of rubber price once for all, RAT encourages rubber farmers to plant rubber in appropriate regions, and reduce area of rubber planted in unsuitable areas, where the cost is high and production is low. Currently, all kinds of agricultural products are competing in quality. Therefore, the government has to find better rubber varieties to boost yield, explore methods to reduce cost, and encourage rubber farmers to engage in deep processing and innovation to enhance added value, so as to ensure industrial stability.
Source: InfoQuest, by Nisarat Wichiensri / Rachada, translated by Xinhua Silk Road
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