09/14/2012

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THAILAND: B30 billion more to shore up rubber prices

Deputy Agriculture Minister Natthawut Saikua said the government may also provide up to 15 billion baht in soft loans to exporters with the aim of buying up to 300,000 tonnes of rubber to keep in the government's stockpile.

The budget approved on 13 Sept. 2012 by the National Rubber Policy Committee may be spent from 1 Oct.-31 March.

The new budget will be on top of the 15 billion baht the government earlier approved to purchase 100,000 tonnes of rubber.

The target buying price will come in line with earlier cabinet approval for the natural rubber intervention scheme at 100 baht per kilogramme for third-class raw rubber sheets and 104 baht per kg for smoked rubber sheets.

The committee will next Tuesday ask for cabinet approval of the spending framework for the proposed 30-billion-baht budget.

This may be approved in tranches of about 5 billion baht until spending meets a combined 30 billion baht over six months.

A subcommittee headed by the Finance Ministry and comprising representatives from relevant agencies also needs to be set up to study the details of the proposed 15 billion baht in soft loans from state banks for rubber exporters to help buy rubber.

Mr Natthawut said Thailand plans to invite Malaysia and Indonesia to a meeting in Thailand to seek longer-term measures for stabilising rubber prices.

The Commerce, Industry and Foreign ministries are required to help coordinate this effort.

The raw sheet rubber price in Thailand in the Songkhla market averaged 83.24 baht per kg on 13 Sept. 2012, up from the previous week's average of 77 baht.

Smoked sheet rubber stood at 83.33 baht, up from 80 baht last week.

Rubber futures rebounded 16% from their lowest levels in almost three years on 14 Aug. after Thailand, Indonesia and Malaysia, representing about 70% of global supplies, announced a cut in exports earlier in the month.

Source: Daily "Bangkok Post", Bangkok; 14 Sept 2012

(Syed Rashid Ali, Karachi, Pakistan)

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