Thread: Thailand to cut rubber output by 700,000 tonnes

Thailand to cut rubber output by 700,000 tonnes
Tuesday October 28, 2008

BANGKOK: Thailand, the world’s biggest rubber producer, plans to cut production by 700,000 tonnes in the six months starting from October to shore up prices, the Agriculture Ministry said yesterday.

“We will encourage farmers to tap less latex as we aim to cut rubber supply by 50% between October to March,” said Deputy Agriculture Minister Theerachai Saenkaew, who oversees rubber matters.

He told Reuters that the cut in output was based on the 1.4 million tonnes Thailand produced from October 2007 to March 2008.

It would be equivalent to around 23% of Thailand’s likely production this year of around 3.1 million tonnes.

The country produced 3 million tonnes in 2007. Theerachai said the government would accelerate its replanting programme by urging farmers to cut down more ageing rubber trees.

It aims to cut the area covered by rubber trees that are more than 25 years old by 64,000 hectares (158,100 acres) a year, up from the current 32,000 hectares per year.

The price of Thai RSS3, a benchmark for physical prices, was quoted at US$1.85 per kg on Monday, just a few months after it struck a 56year high of US$3.25 in July.

Tokyo rubber futures reflect the bearish outlook, falling more than 5% on Monday, with weaker oil prices and a stronger yen adding to the pressure on prices.

Car sales are slumping as consumers turn cautious in the face of a global financial crisis, and with more than 70% of rubber sales going to the car tyre industry, top producers Thailand, Indonesia and Malaysia are feeling the pinch.

As part of the plan to reduce rubber supply, Thailand will also reduce physical rubber trading days in local trading centres across the country from October to March, when supply was expected to fall, Theerachai said.

“Trading days would be cut by two or three days per week to meet falling supply,” he said.
- Reuters

biz.thestar.com.my

nasty trend in declining exports
That plus a loss of tourist revenue doesnt look good for the kingdom

more good news ... how long can the baht hold up

Originally Posted by Mid

Thailand, the world’s biggest rubber producer, plans to cut production by 700,000 tonnes in the six months starting from October to shore up prices, the Agriculture Ministry said yesterday. “We will encourage farmers to tap less latex as we aim to cut rubber supply by 50% between October to March,” said Deputy Agriculture Minister Theerachai Saenkaew, who oversees rubber matters.

Seeing as close to 90% of rubber plantations are owned by small growers I can't see the thickhead minister encouraging them to cut their income by close to 75%.

50% reduction in tapping as well as the dropping price . . . that would condemn many of these smallholders to real poverty . . .

Cut down old trees and re-plant so the farmers can wait 7 years before being able to tap again????

Most clones in Thailand are of Malaysian origin and supply latex far longer than Thai clones . . .

Now is the time to up production to make up for the shortfall on price to keep the standard of living they set up.

Now, if these politicians had to work for their money . . . shiortsighted and stupid

Luckily my rubber trees are still best part of 4 years away from tapping, only about 2 1/2 years old at the moment (i've got 36 rai just outside Buriram), so hopefully a lot better price then.

^ As you mentioned re. fruit . . . also not a good future. Having an alternative is a good thing.

Having said that, you have experience in Chanthaburi where many rubber farmers have other orchards . . . this is not the case elsewhere . . . and Chanthaburi only accounts for a small percentage of total rubber production.

Older trees, manager well, can give you more latex than middle-aged ones,provided they were not overtapped during the couple of boom-months . . . sadly saw that too often . . . no tapable virgin bark left and now they have to go back to A or B panel . . . low and with the usual deep tapping technique, almost dry

So much for your novelty rubber plantation, Dave. You'd never be comfortable in Si Sa Set with the natives. Stay in Sukhumvit where you're safe. Sucker....u know who.

Did a little rubber business in Thailand about 5 years ago. When the demand for rubber shot up the guy turned into a real twat.

Originally Posted by jim1176

Did a little rubber business in Thailand about 5 years ago. When the demand for rubber shot up the guy turned into a real twat.

Have a shirt-tail relation in the hills out of Petchabun that systematically change over from a stable and thriving pineapple to rubber some 6 years ago. As you might know, young rubber trees need a few years to come to "sapping" maturity. I'm hoping he didn't sell himself short with this news.....there is a specialized worldwide market for rubber despite the advances in synthetic plastics.

Originally Posted by El Gibbon

These folks are not idiots even though they do rubber for a living. Now its time to emphasize their fruit production

Yep, when the price drops they go off and do something else. Further afield this practice will have more grave repurcussions becuase in the US, as a result of the corn and wheat prices plummeting farmers will switch to something more profitable or not plant at all. This isnt good when world grain reserves are already at near record lows. There could be more food riots next year.

alot of older plantations are being replaced with palm, which at the moment is still in strong demand.
the Inlaws have several hundred rai of palm and are doing rather nicely....

^ Palm oil prices have tanked worse than rubber, Thailand's only consolation is that
they don't export theirs - - not enough production.

Wasn't there a question on trees per rai? Am I getting old and imagining things?

despite the low prices , the family is still raking in over 1 millon a month... and still have to leave fruit on the trees due to not enough staff.
last month daddy brought himself a new S class merc....

Same with rubber, except that the government is sticking their noses into it

bad thing about rubber is half your profit goes to the thieving cutters,.

Originally Posted by panama hat

^ Palm oil prices have tanked worse than rubber, Thailand's only consolation is that
they don't export theirs - - not enough production.

Wasn't there a question on trees per rai? Am I getting old and imagining things?

I think you mentioned 700 trees on 50 rai or something like that...seemed a bit generous, more like 600-700 per rai.

^ But where have the posts gone? Surely there was nothing in them to attack the monarchy, clip wings off angels and invite Beelzebub into the living room . . .

700 trees per rai?!!!! I must have been smokin' something vile while typing that . . . oh, I don't smoke. Doubled the zero, perhaps

Nope, keda, it is about 300 trees per hectare . . . mature trees. I'm pretty sure it is 70 trees per rai.

Rubber trees need about a minimum of 2 metre distance from one another due to the nature of their root system. That's why intercropping is viable until the age of 5 or so.

A higher density is usually planted but that is to make up for the percentage that will die.

Beelzebub

I have between 80 and 100 rubber trees per rai on my little plot in Buriram.

80 is ok, more will stifle growth, small circumference equals quickly using up the panels if you're doing 1/2 or even 1/4 cut, and your trees will not get enough nutrients, your canopy will be sparse as well.

Want some tips, send me a PM.

from the OP

BANGKOK: Thailand, the world’s biggest rubber producer, plans to cut production by 700,000 tonnes in the six months starting from October to shore up prices, the Agriculture Ministry said yesterday.

appears thay may have a little help .................

Thailand, Indonesia, Malaysia to Cut Rubber Exports (Update1)
By Yoga Rusmana and Naila Firdausi

Dec. 13 (Bloomberg) -- Thailand, Indonesia and Malaysia, the world's three biggest natural rubber producers, plan to reduce rubber shipments next year to help revive prices.

The three countries agreed to cut rubber exports by a combined 700,000 metric tons next year, or a tenth of their annual harvest, said Nurmala Abdul Rahim, Malaysia's deputy secretary general at the Ministry of Plantation Industries and Commodities in Bogor, Indonesia.

The producers are discussing steps after rubber prices in Tokyo tumbled 70 percent since reaching a 28-year high in June on slowing demand. Thailand, Indonesia and Malaysia in October agreed to jointly reduce output by 215,000 tons next year by felling trees.

``With immediate implementations, we hope price of natural rubber will improve,'' Abdul Rahim said. The export limitation and output cut may reduce the global market supply by as much as 915,000 tons next year, she said.

Futures for May delivery in Tokyo slipped 3.8 percent to 105.8 yen ($1.16) a kilogram yesterday after the U.S. Senate rejected a bailout plan for U.S. automakers, heightening concern demand for car tires will decline. Prices reached a six-year low of 99.8 yen on Dec. 5 after touching a 28-year high of 356.9 yen on June 30.

The three countries last year harvested about 7 million tons of rubber and exported a combined 5.5 million tons, according to the tripartite rubber council.

Defaults

Rubber associations of Thailand and Malaysia also agreed to tell its members not to ship natural rubber at below $1.35 a kilogram, following Indonesia's plan, Abdul Rahim said.

The tripartite rubber council also called for the three governments to talk with counterparts at importing countries to help prevent buyers from defaulting on orders, Abdul Rahim said. Out of disputes for 300,000 metric tons of rubber between overseas buyers and exporters from Indonesia, Thailand and Malaysia, 200,000 tons have now been settled, she said.

``The recent drastic decline of natural rubber prices was aggravated by non-fulfillment of contracts,'' Abdul Rahim said.

The three rubber-producing nations plan to hold a ministerial meeting on rubber in Kuala Lumpur in January to adopt measures including on reference price and assistance to small- scale plantation owners.

bloomberg.com

Thai New Premier to Hold Rubber Export, Boost Prices (Update1)
By Rattaphol Onsanit

Dec. 17 (Bloomberg) -- Thailand, the world’s biggest rubber producer and exporter, will hold back shipments of the commodity to limit supply, after a plan to cut production failed to keep prices from tumbling to a six-year low.

“The government will provide budget to help store rubber output,” Prime Minister-elect Abhisit Vejjajiva said in an interview today. “This is to reduce pressures on prices later this year and early next year.”

Abhisit, who won a parliamentary vote Dec. 15, took office amid tumbling commodity prices, sagging exports and political unrest. Rubber futures have plunged 67 percent from the 28-year high reached in June, as the global recession cut auto sales and forced carmakers to pare output, leading to a drop in tire demand.

“We believe that they are taking some action and it will have a certain impact on the market,” Roka Komiya, a trader at Marubeni Corp., said by telephone from Tokyo.

Rubber for May delivery gained 1.3 percent to 117.5 yen a kilogram at 3:35 p.m. on the Tokyo Commodity Exchange, recovering from a 0.2 percent drop at the 11 a.m. local time break. Futures reached a six-year low of 99.8 yen on Dec. 5.

Abhisit’s plan to hold back exports adds to pending cuts in outputs by private players in Thailand, Indonesia and Malaysia, whose production account for 70 percent of global supply.

The three countries agreed in October to jointly pare output by 215,000 tons mainly by replanting trees. They further decided to reduce exports by a combined 700,000 tons next year, Nurmala Abdul Rahim, Malaysia’s deputy secretary general at the Ministry of Plantation Industries and Commodities, said Dec. 13.

Abhisit’s victory marks a power shift from loyalists of Thaksin Shinawatra, the former premier ousted in a 2006 coup, whose populist policy lead them to win four national elections since 2001.

bloomberg.com

Thailand May Purchase 200,000 Tons of Rubber to Trim Supply
By Rattaphol Onsanit

Jan. 5 (Bloomberg) -- Thailand, the biggest rubber exporter, may purchase as much as 200,000 metric tons of the commodity from growers and keep it in storage to reduce supply after prices more than halved last year.

“The aim is to draw 100,000 or 200,000 tons from the market,” Somchai Charnnarongkul, director-general of the farm ministry’s Department of Agriculture, said in a phone interview today. “The plan would be proposed to the Cabinet next week.”

Global recession has pared demand for car tires, undermining efforts by Thailand, Indonesia and Malaysia, the world’s biggest producers, last year to bolster rubber prices by trimming output. The raw material tumbled 56 percent in 2008, the biggest slump in at least 17 years.

The farm ministry will seek 4 billion baht ($114.8 million) to fund the price-support plan, Somchai said. The government will provide funds for farmers to store the rubber in warehouses until prices rise to attractive levels, Prime Minister Abhisit Vejjajiva said in an interview on Dec. 17.

Thailand may ship 2.6 million tons this year, compared with 2.75 million in 2008, as producers plan to pare production from 3 million tons, according to the Thai Rubber Association.

Rubber for June delivery advanced 6.5 percent to 145 yen a kilogram ($1,576 a ton) on the Tokyo Commodity Exchange at the 2:20 p.m. local time. The commodity fell to a six-year low of 99.8 yen on Dec. 5, having reached a 28-year high of 356.9 yen five months earlier.

bloomberg.com

1 hectare is 10.000 sq meters and 1 rai is 40x40=1600 sq meters - some people don't know that when their are telling about their ESTATE.
And again 1 ha. is 2,47 acre - so just keep that in mind..