Government asked to buy rubber

Government asked to buy rubber

A rubber farmers' network in Phayao has urged the government to intervene in the market in an attempt to lift the prices of rubber sheets to 60 baht a kilogramme from 47 baht currently.

Northern growers want the state-run Rubber Estate Organisation (REO) to buy rubber in the market to shore up prices, forcing middlemen to match what it pays, said Sai Inkham, leader of the Rubber Farmers' Network.

The proposed invention, he said, could increase the prices for raw rubber sheets to between 55 and 60 baht per kilogramme, from 46-47 baht. He expects rubber cup lump prices could be increased to 35-40 baht a kilogramme from the current range of 21-22 baht.

Sheet rubber was selling for 100 baht a kilogramme just two years ago but prices have been on a steady downward trend since then.

Aram Phlusuan, 48, hangs rubber sheets to dry at his 10-rai plantation in Songkhla. (Photo: Wichayant Boonchote)

World rubber prices are at a four-year low because of a supply glut that totalled 714,000 tonnes last year and is expected to increase this year, mainly because of higher output from Thailand.

Much of the new output is coming from smallholders who were encouraged to plant rubber trees a decade ago when the market was booming. Those trees have now matured but demand has not kept pace with supply.

Most rubber farmers welcomed the measures the government announced on Tuesday to help ease the pain of falling prices, said Mr Sai.

The National Rubber Policy Committee has approved handouts of 1,000 baht per rai to farmers who own no more than 15 rai of rubber trees.

The subsidy, which will cost taxpayers 8.5 billion baht, will be disbursed through the Bank for Agriculture and Agricultural Cooperatives (BACC) next month.

Mr Sai said most farmers found the measure acceptable, although he conceded that in the current market, prices could not be raised to 80 baht a kilogramme as southern rubber farmers have demanded.

The government is also making 25 billion baht in soft loans available to help the rubber industry improve efficiency and working capital.

The programme is expected to encourage processors to absorb a glut of 500,000 tonnes of rubber latex a year from planters, Industry Minister Chakramon Phasukavanich said this week.

The ministry aims to raise the price of rubber to 66 baht per kg under the scheme.

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