THAILAND: Rubber planters struggle to stay afloat

Rubber production costs in Thailand now stand at 64.14 baht per kg while the average price of smoked rubber sheets is 55.19 baht, resulting a nine-baht loss per kg for growers, he added.

"Given our rubber supply of 4.2 million tonnes, 36 billion baht will disappear from the industry in 2014 or 3 billion baht a month," the source said.

The price of raw rubber sheets prices rose by 0.25 baht to 52.82 baht a kg and that of ribbed smoked sheet RSS-3 grade rubber grew 0.23 baht to 55.61 baht on Friday (22 Aug. 2014), according to the Rubber Research Institute.

Rubber growers have been trying to cope with the prolonged slump, mainly by processing the produce and auctioning.

A network of rubber planters, which buys up to 200,000 kg of latex a day, borrowed 50 million baht from a state fund to build processing factories.

Vithoon Koopanthawee, an executive of a motorcycle dealer in the lower South, said processing rubber for local use and finding new markets could solve the problem.

"Cutting production costs also helps, but not price compensation or intervention because the price slump is a world phenomenon," he said.

Charn Leela-aporn, a former adviser to the National Economic and Social Advisory Council, said the situation remained worrisome.

"More rubber trees have been planted in both Thailand and abroad, especially in Indonesia, where production and raw material costs are lower than in Thailand," he said.

"Lower farmland prices — at 6,000 to 15,000 a rai — have also attracted Thai companies to invest in the neighbouring country," said Mr Charn.

Source: Daily “Bangkok Post”, Bangkok; 22 Aug 2014
(Syed Rashid Ali, Karachi, Pakistan)