08/26/2010

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THAILAND: CP bullish on rubber outlook - Higher-quality variety to drive sales in 2011

Charoen Pokphand's Crop Integration Business Group expects the sale of newly developed JVP 80 rubber variety will rise by 20% next year due to a bullish rubber market and strong demand for drought-resistant para variety.The company, a unit of Charoen Pokphand Group, projects to produce and supply about 600,000 saplings of JVP 80 to the domestic market in 2011, up from an estimated 500,000 this year, said Khunsri Thongyoi, the company's assistant vice-president."The dry spell is expected to continue next year and the conditions will drive growers to opt for a more premium variety," he said.He said the severe drought earlier this year significantly affected nurseries that breed the state-developed RRIM 600 and RRIT 251 clones as their saplings, as it led to a low survival rate of only 40-50% instead of the normal rate of 70-80%.The crop integration group produces and supplies these saplings, so it suffered as well.Sales from the two para saplings this year are expected to miss an earlier projection of 1.5 million pieces, dropping to only about 250,000 saplings. However, this should be offset by strong sapling prices, he said.Prices of RRIM 600 jumped to about 30-35 baht apiece this year, compared with 18-20 baht last year. JVP 80 saplings rose strongly to 50-60 baht a unit, up from last year's 35 baht.The market for para saplings is expected to be intense next year, following a bullish rubber industry and the government's rubber plantation expansion plan. The government plans to spend 3.97 billion baht from 2010-12 for 800,000 rai (1,600 sq m=one rai) of new rubber plantations. The areas will be in the Northeast (500,000 rai), and the North (150,000 rai) with the remainder scattered in the eastern, central and southern regions.The project will increase Thailand's planted rubber area to more than 18 million rai from 17.4 million rai reported in 2009, of which 11.5 million rai are harvested sites that produce up to 3.23 million tonnes of para rubber.Average export prices of ribbed smoked rubber sheets (RSS3) for the first eight months of this year rose sharply to 110 baht per kilogramme, compared with 66.29 baht last year and 87.10 baht, in 2008, when rising oil prices pushed up many food and energy crop prices.The boom in fuel crops has benefited the group, major producers and suppliers of palm oil and rubber saplings. The company expects 2 billion baht from these sectors in 2010.(Syed Rashid Ali, Karachi, Pakistan)

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