China's plan to invest in rubber plantations in Thailand must be carefully considered, says Grisada Boonrach, minister to the Ministry of Agriculture and Cooperatives, but such projects must not impact local farmers.
His comment was made in response to a report that China Hainan Rubber Industry Group is set to invest more in rubber plantations in the country, as it has done recently in the CLMV countries (Cambodia, Laos, Myanmar and Vietnam). Under these schemes, Chinese nationals oversee rubber production on land leased by the company.
The company also wants to set up a joint venture with the Rubber Network Council (RNC) and Rubber Farmers Institute of Thailand (RNRF) to directly buy rubber from farmers at around 2 baht per kilogramme higher than they sell to wholesalers at the moment.
Mr Grisada said that as the issue is quite sensitive a thorough study must be undertaken to ascertain the impact on domestic producers. His major worry being that there might be a repeat of the price dumping by Chinese middlemen in fruit markets in the eastern provinces.
He further insisted that the ministry will not support any proposal that goes against domestic policy, including the ministry's top priority of reducing the number of rubber plantations in the country.
He also said that the ministry intends to verify whether the number of plantations has fallen, as claimed by the RNC. The ministry requires a reduction of around 200,000 rai per year to keep the price of the product within its target range.
Meanwhile, rubber farmers living in Songkhla, Satun, Yala, Pattani and Narathiwat provinces have been preparing their own plan to reduce a number of rubber plantations, with a target of 2 million rai, which will be later submitted to the ministry.
They have expressed confidence that their proposal can push the price up to 80 baht per kilogramme, compared with the current price of raw milk rubber which has fallen to 41.50 baht per kilogramme.
A Natural Rubber Policy Committee meeting on Dec 15 was told that Chinese imports of rubber from Thailand have declined since 2016, despite increasing demand in China.
The drop was attributed to the growth of rubber plantations in Cambodia, Laos, Myanmar and Vietnam, over the past 10 years.
The trees there have been ready for tapping over the past one or two years. These countries currently supply 5.3% of the commodity to the global rubber market.
China, the world's biggest rubber consumer, has increased rubber imports from these countries to feed domestic demand, according to the committee.