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Government moves to fix rubber prices

Government moves to fix rubber prices

Rubber companies in Phuket, home to the country’s biggest rubber dealer, Von Bundit, will be happy with the Pheu Thai Government, which on Tuesday approved a proposal to shore up the price of para rubber to B120 a kilo.

Thursday 2 February 2012, 10:25AM

Deputy Government Spokesman Anusorn Iamsa-ard said the Thai rubber price currently stands at B107 a kilo.

The price dropped to a low of B85 at the end of last year, due to the global economic downturn, the Japanese tsunami and the Thai flood crisis, which caused the suspension of automobile production.

The fall in the price for Thai rubber was aggravated by China buying cheaper Indonesian rubber, and by investors taking profits by selling rubber contracts. The Government plan is to create a buffer stock, buying rubber when surplus supply threatens to depress the price, and selling it later when prices rise.

The scheme will be operated through the Bank for Agriculture and Agricultural Cooperatives (BAAC), which will offer interest-free loans of B5 billion to agricultural institutes including agricultural cooperatives, and B10 billion to the Rubber Estate Organization.

These organisations will use the loans to buy rubber from producers for processing and then sell it later at an appropriate price. The government will compensate BAAC’s costs.

The Government’s scheme to support the price of rice has seen exports plummeting.               


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