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05. November 2018

THAILAND: Study pushes rubber for national agenda

The government is being urged to add rubber prices to the national agenda, requiring immediate attention, as the country has lost several billions of THB from the rubber price slump.

Aat Pisanwanich, director of the Center for International Trade Studies at the University of the Thai Chamber of Commerce (UTCC), said its study found the income of rubber farmers and rubber-related business operators has significantly dropped from 2011, when the global rubber prices were quoted at USD 6 (THB 200) per kilogram. "Farmers and rubber operators earned an estimated THB 712.8 billion in 2011," he said. "But this year, in line with global rubber prices of as low as USD 1.7 (THB 56.6) per kg, their income is estimated at only 274 billion, down 72 % from 2011. It comes as no surprise the economy in the South, which is heavily reliant on rubber, is in the doldrums." Aat said many rubber farmers were found to have hefty operating losses.

The Thai rubber production cost is estimated at THB 63 per kg, but domestic rubber prices are quoted at only THB 40 per kg. A price that allows farmers to stay in business would be THB 70-80 per kg, said the UTCC. The number of rubber farmers in Thailand fell drastically from 1.6 million households in 2014 to only 1.4 million this year, said Aat. The study found several rubber farmers shifted to grow other crops such as fruit or oil palm. However, it found total rubber plantation area is still rising, to 20.6 million rai compared with 19.5 million rai in 2016 and 12.9 million rai in 2007, with most gains from the Northeast.

"We propose the government put the rubber price issue as an urgent national agenda item requiring a quick fix," he said. "Measures using more rubber in road construction, aircraft tyres, railroad sleepers, and other processing industries should be introduced." The state agencies handling the rubber industry also need restructuring to ensure their unity in handling the crisis, while farmers should band together to raise their bargaining power, said the UTCC. The industry should develop big data on rubber, while a national rubber warning and alarm center should be established to evaluate trends, said Aat. He also called for the government to use digital marketing to promote rubber products, setting up a rubber fund, and promoting premium rubber smoked sheet production.

Source: Daily “The Bangkok Post”, Bangkok; 31 Oct 2018
(Syed Rashid Ali, Karachi, Pakistan)

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