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Collapse of Chinese buyer hits Thai rubber suppliers hard

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Collapse of Chinese buyer hits Thai rubber suppliers hard

By THE NATION

 

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The fluctuations in the price of rubber is caused by many factors, such as the US-China trade dispute which has led to banks restricting loans to rubber companies, while farmers are being forced to sell their products at a lower price to secure revolving funds for next year’s crop, a senior official said on Saturday.

 

 

Sunan Nuanphromsakul, acting governor of the Rubber Authority of Thailand (RAOT), added, “However, the most serious impact on the Thai rubber industry was caused by the collapse of Chongqing General Trading Chemical Company in China last September,” he said. “Chongqing was one of the biggest buyers of Thai rubber at 1.5 million tonnes per year. Their absence from the market has caused rubber price to plummet drastically.”

 

Sunan further explained that in order to solve the rubber price problem in the short term, the government uses the price guarantee scheme to help rubber farmers who are registered with the RAOT before August 12.

 

“There are over 1.7 million farmers registered with the RAOT, with a combined plantation area of 17.2 million rais. The rubber trees must be of at least seven years old to be eligible for the subsidy,” he said.

 

The scheme guarantees a price of Bt60 per kilogram for premium grade rubber sheets, Bt57 per kg for latex and Bt23 per kg for cup lumps. The maximum guaranteed amount will not exceed Bt240 per kilo per rai per year and will be limited to 25 rai per farmer.

 

“As for long-term measures, the RAOT is working with related government agencies to design projects to promote the use of rubber products both domestically and overseas to reduce the excessive stocks of rubber,” he said. “For example, we aim to provide loans to rubber-processing entrepreneurs who wish to invest in new machines and facilities to manufacture high-value rubber products such as rubber gloves, automotive tyres and specialised rubber for engineering applications.

 

“The loan budget is initially set at Bt10 billion, and is expected to increase domestic rubber consumption from 60,000 tonnes to 100,000 tonnes annually,” Sunan added.

 

Related news:

 

Cabinet earmarks over Bt24 bn in subsidies for rubber farmers

 

Rubber Authority, TTCL sign MoU on management project under international guidelines

 

Source: https://www.nationthailand.com/news/30377557

 

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-- © Copyright The Nation Thailand 2019-10-20

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Thanks. However it is not clear to me what the 'bio-sourced and biodegradable' materials consists of. Would there be no rubber at all anymore in this concept tire ?

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Maybe something to do with the fact bordering Malaya has premium grade rubber sheet at a cost of only 45 baht...

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The monetary policy of the central bank makes itself felt, unfortunately the losers are the farmers again!

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On 10/20/2019 at 7:01 AM, rooster59 said:

The fluctuations in the price of rubber is caused by many factors,

 

Forgetting the principal, the baht far too strong;
to be internationally competitive, Thailand can not afford to have a money too strong;
this is the case ;

and the Bank of Thailand has still not found the right solution to remedy it, whereas the ECB found it:
negative interest on the money deposited in the bank to force these banks to invest in the real economy and not on speculative stuff.

But that's the problem of Thais, everything that is not Thai is not good.

The harder will be the fall.

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19 hours ago, trainman34014 said:

What happened to using rubber for road surfaces; thought this was going to solve the problem and make the rubber farmers rich ?

They probably found out that it turned the roads into one big slip n slide.

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On 10/20/2019 at 7:58 AM, RotMahKid said:

They have to change to other products soon, because alternatives for rubber tires are

already on the way see: https://michelinmedia.com/michelin-vision-concept-tire/

 

 

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The rubber produced by thai ' rubber farmers ' is Latex . AFAIK car tires are not made of Latex ... but condoms , gloves etc ...

Edited by nobodysfriend
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Now the ruinous circle of forest exploitation and destruction starts to take hold. High-value trees and ecosystems that took thousands of years to develop have been systematically destroyed across the region, to make way for low-value and low profit rubber and palm oil. Now, the scales have begun to tip irreversibly.

As the world turns away from these commodities, the folly of this exploitation comes full-circle. Next will be the rubber and palm oil corporations screaming for subsidies and the governments involved to "do something".

The government ministers responsible already "did something" by allowing it to happen in the first place, to fund their expensive cars and lavish lifestyles. There is no coming back from this. In the end, you reap what you sow.

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On 10/20/2019 at 7:01 AM, rooster59 said:

“As for long-term measures, the RAOT is working with related government agencies to design projects to promote the use of rubber products both domestically and overseas to reduce the excessive stocks of rubber,”

On the other hand, don't the subsidies of almost 60% actually encourage current production and oversupply? In turn requiring more subsidies in infinitum. This approach has been Prayut's policy since 2014 and continues to prove itself to be an economic addiction rather than a cure.

On 10/20/2019 at 7:01 AM, rooster59 said:

The scheme guarantees a price of Bt60 per kilogram for premium grade rubber sheets, Bt57 per kg for latex and Bt23 per kg for cup lumps.

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On 10/20/2019 at 7:01 AM, rooster59 said:

Collapse of Chinese buyer hits Thai rubber suppliers hard

Rubber is like any other commodity, you have a product for sale and it has a market value.

You have to harvest it, turn it into a product and sell it within that value. If you can't then you go out of business... get smart or get out !

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