BANGKOK, April 23 (Xinhua) -- Thailand, the world's largest rubber producer, is working together with Malaysia and Indonesia to reduce rubber supply so as to stabilize prices, the Rubber Authority of Thailand said on Sunday.
The three countries held a meeting recently to find ways to ensure the price stability of rubber since the current prices remain volatile, according to Titus Suksaard, governor of the Rubber Authority of Thailand.
Titus said the three countries, which account for around 70 percent of the world's natural rubber supply, will also increase domestic demand for natural rubber as much as possible.
"Prices keep swinging. We should buoy the price since the deadly flood in south Thailand last year has lowered the rubber supply and rubber farmers in India and Indonesia reduced rubber tapping," said Titus.
He added that rubber prices should be at least 20 percent more than production costs and the rubber price in Thailand is only 63 baht (1.8 U.S. dollars) per kilogram with a production cost of 50 baht (1.4 dollars) per kilogram.
Titus said the growth of automobile industry is a major factor to boost rubber prices. He mentioned that the world's big economies are on the rising trend with a growth in automobile industry of 7.37 percent year on year.
Thailand has approved to extend a rubber price subsidy scheme worth 20 billion baht and loan packages totaling 10 billion baht to private rubber processing operators to help them continue production.
Malaysia, Indonesia and India have also implemented policies to reduce rubber plantation to bolster market prices.
The rubber bodies among the three countries will disseminate information of rubber markers to avoid rubber speculation. Enditem
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