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Thailand needs 30 percent cut in rubber plantations

Staff Writer |
Thailand needs to substantially reduce its rubber plantations to combat the chronic rubber price slumps, said Agriculture and Cooperatives Minister Kritsada Bunrat on Wednesday.

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A total of 7.6 million acres of rubber plantations in Thailand is yet to be reduced by as much as 30 percent in order to contain the price slumps, stop oversupplying the world market and prevent further losses to an estimated 1.2 million rubber planters nationwide, Kritsada said.

Thailand has produced 4.5 million tons of raw rubber blocks and smoked rubber sheets for both export and domestic consumption in a year.

But the average rubber price has dropped to 1.21 U.S. dollars per kilogram in the domestic market, compared to an average of 1.90 U.S. dollars per kilogram in the producing cost borne by the rubber planters, according to the agriculture minister.

Meanwhile, Thailand's domestic consumption ratio of rubber needs to be largely increased in volume, given the global economic downtrends which have slowed down the world market's demands for rubber, he said.

Kritsada quoted a World Bank report as saying the average world rubber price will not rise higher than 2 U.S. dollars per kilogram in the next five years.

He called on varied government agencies to increase the uses of rubber to bring up the prices in the domestic market and reduce the surplus in the export market with sustained price cuts.

The public sector, which may considerably raise the demands for rubber, includes the Highways Department and the Rural Roads Department, which may use rubber as an alternative to asphalt to build roads in the provinces, while the private sector may manufacture more tires and gloves, among others, with the use of rubber.

Of the total yearly production of about 4.5 million tons of rubber, Thailand's domestic consumption has amounted to about 600,000 tons, only accounting for 14 percent, he said.

That compared to Malaysia's domestic consumption of rubber which has accounted for 35 percent of its total production volume, he said.

Thailand ranks among the world's biggest rubber producers alongside Indonesia and Malaysia.

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