BANGKOK, January 29, 2009 (AFP) – Thailand’s cabinet Thursday approved a plan to stockpile 200,000 tonnes of rubber from next month in a bid to stabilise prices which have almost halved in a year. Thailand’s rubber industry, based mostly in the southern and eastern provinces, has suffered in recent months from falling oil prices, which have helped make synthetic rubber more competitive.
Fears of a global recession and the resulting sluggish demand for cars has further added to pressure on natural rubber prices. About 85 percent of rubber production goes into making tyres.
Thailand, Malaysia and Indonesia, which together supply about 70 percent of the world’s rubber, are due to meet next month to plan production cuts to help boost global prices. The 8-billion-baht (229-million-dollar) scheme will see the government hand out interest-free loans to farmers’ cooperatives that will allow them to hold back eight percent of the rubber they produce for export each year.
The kingdom exports about 2.5 million tonnes of rubber annually and sold 2.2 million tonnes in the first nine months of 2008, according to the Thai Rubber Association.
The average price for Thai rubber was 48.00 baht per