As Rice Mountain Shrinks, Thailand Risks Amassing One for Rubber
Supunnabul Suwannakij Jasmine Ng
April 2, 2015
A farmer walks past rubber trees as latex collects in a cup at a plantation adjacent to the Thai Hua Rubber Pcl factory in Samnuktong, Rayong province, Thailand.
Photographer: Dario Pignatelli/BloombergsurplusPolitical Supportcriminal chargesFarmer BackingCurbing Exports
Thailand, Indonesia and Malaysia, which account for two-thirds of world production, said in November they would limit exports to tighten supply. The global surplus will narrow to 51,000 tons in 2016 from an estimated 77,000 tons this year, the International Rubber Study Group said in January.
Prices of ribbed smoked sheet grade 3 in Bangkok, the Thai benchmark, averaged 58.59 baht ($1.80) a kilogram in March compared with 52.79 baht in October. That was lower than rubber on the Shanghai Futures Exchange, which averaged about 12,802 yuan a ton, or 67 baht a kilogram. The contract in Shanghai increased 1.3 percent to 12,755 yuan on Thursday.
The junta in Thailand is also encouraging farmers to fell aging trees over an area of 400,000 rai (158,000 acres) annually, with some land being turned over to palm oil. That may reduce production by about 100,000 tons a year, according to data from the Office of Agricultural Economics. Output will be 4.3 million tons in 2015, the Association of Natural Rubber Producing Countries estimates.
Crude Slump
Supunnabul Suwannakij Jasmine Ng
April 2, 2015
A farmer walks past rubber trees as latex collects in a cup at a plantation adjacent to the Thai Hua Rubber Pcl factory in Samnuktong, Rayong province, Thailand.
Photographer: Dario Pignatelli/BloombergsurplusPolitical Supportcriminal chargesFarmer BackingCurbing Exports
Thailand, Indonesia and Malaysia, which account for two-thirds of world production, said in November they would limit exports to tighten supply. The global surplus will narrow to 51,000 tons in 2016 from an estimated 77,000 tons this year, the International Rubber Study Group said in January.
Prices of ribbed smoked sheet grade 3 in Bangkok, the Thai benchmark, averaged 58.59 baht ($1.80) a kilogram in March compared with 52.79 baht in October. That was lower than rubber on the Shanghai Futures Exchange, which averaged about 12,802 yuan a ton, or 67 baht a kilogram. The contract in Shanghai increased 1.3 percent to 12,755 yuan on Thursday.
The junta in Thailand is also encouraging farmers to fell aging trees over an area of 400,000 rai (158,000 acres) annually, with some land being turned over to palm oil. That may reduce production by about 100,000 tons a year, according to data from the Office of Agricultural Economics. Output will be 4.3 million tons in 2015, the Association of Natural Rubber Producing Countries estimates.
Crude Slump
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