Rubber industry must be entirely revamped, PM Prayut says

[webfact]

Rubber industry must be entirely revamped, PM says

BANGKOK, 12 January 2016 (NNT) – The Prime Minister has stated the issue of rubber pricing must be solved within the entire rubber manufacturing industry and is set to declare to the cabinet a budget to be used to help deal with this issue.

Prime Minister Gen Prayut Chan-o-cha stated before chairing the National Water Resources Committee meeting today, that the low rubber price is an issue that requires an integrated effort to solve, starting from the purchase of fresh rubber to processing.

He said ministries should allocate their budget to make room for the purchase of rubber products to increase domestic rubber consumption. He stated that he will declare during the Cabinet meeting tomorrow regarding the guidelines to solve the rubber pricing issue along with the disbursement.

He stressed the solution must me made in balance with proper management to ensure a smooth process.

The National Water Resources Committee meeting today will acknowledge the current water situation in 4 major dams, the water supply strategy for drought affected areas, and the water management plan for both 1 year and 6 months periods.


-- NNT 2016-01-12

[daoyai]

The world price is the price, but this may lead the dangerous rubber tree growers to think there is something being done for them and may hold them off until it becomes the next administration's problem. Or they could subsidise the price as was done for rice in the recent past.

[Transporter]

What! Not enough rubber allocated for Farang size Condoms. An oversight easily rectified.

[Eric Loh]

Not a thoughtful suggestion. He should place more emphasis on R&D to expand rubber use. More importantly, he should seek cooperation from the tripartite arrangement with Indonesia and Malaysia on pricing and supply. 3 of them accounts for about 80-85% of world rubber production. He should just stick to being a soldier and let proper qualified politicians govern.

[halloween]

Not a thoughtful suggestion. He should place more emphasis on R&D to expand rubber use. More importantly, he should seek cooperation from the tripartite arrangement with Indonesia and Malaysia on pricing and supply. 3 of them accounts for about 80-85% of world rubber production. He should just stick to being a soldier and let proper qualified politicians govern.

Could you expand on the concept of "proper qualified politicians" please. Should be highly amusing.

[Eric Loh]

Not a thoughtful suggestion. He should place more emphasis on R&D to expand rubber use. More importantly, he should seek cooperation from the tripartite arrangement with Indonesia and Malaysia on pricing and supply. 3 of them accounts for about 80-85% of world rubber production. He should just stick to being a soldier and let proper qualified politicians govern.

Could you expand on the concept of "proper qualified politicians" please. Should be highly amusing.

You find the concept of proper elected politicians amusing?

[halloween]

Not a thoughtful suggestion. He should place more emphasis on R&D to expand rubber use. More importantly, he should seek cooperation from the tripartite arrangement with Indonesia and Malaysia on pricing and supply. 3 of them accounts for about 80-85% of world rubber production. He should just stick to being a soldier and let proper qualified politicians govern.

Could you expand on the concept of "proper qualified politicians" please. Should be highly amusing.

You find the concept of proper elected politicians amusing?

Now Eric, try not to be musteline. The words you used were "proper qualified politicians" and I wait expectantly for you to start giving examples from the PTP All-Stars.

[sebastion]

What all the industries here need be it rice/rubber/palm oil is cut out the horrid middlemen that prey on the farmers.

It's a tough task because they are always politically connected and face no scrutiny.

[Eric Loh]

Not a thoughtful suggestion. He should place more emphasis on R&D to expand rubber use. More importantly, he should seek cooperation from the tripartite arrangement with Indonesia and Malaysia on pricing and supply. 3 of them accounts for about 80-85% of world rubber production. He should just stick to being a soldier and let proper qualified politicians govern.

Could you expand on the concept of "proper qualified politicians" please. Should be highly amusing.

You find the concept of proper elected politicians amusing?

Now Eric, try not to be musteline. The words you used were "proper qualified politicians" and I wait expectantly for you to start giving examples from the PTP All-Stars.

Really not hard to see that the current lot of ministers are not in the same class as previous government except for Somkid from an incumbent past PTP related party. Worse, these present lot not even true representative of the people. Maybe that's why they find no motivation to work as they need not seek re-election.

[NickJ]

They could invent a bio-degradable condom........

[Evilbaz]

They could invent a bio-degradable condom........

Could you use it more than once?

[FangFerang]

The eyes open slowly to the future. Close and see the past so fast. Linger for a moment on the knife edge of forever

and see a way....

When the eyes finally open, when there is finally light...

When there is sense and sensation drawn together at the

vanishing point..............

[JAG]

The eyes open slowly to the future. Close and see the past so fast. Linger for a moment on the knife edge of forever

and see a way....

When the eyes finally open, when there is finally light...

When there is sense and sensation drawn together at the

vanishing point..............

Two more pints of whatever you're on please!

:)

Edited January 12, 2016 by JAG

[Srikcir]

Not a thoughtful suggestion. He should place more emphasis on R&D to expand rubber use. More importantly, he should seek cooperation from the tripartite arrangement with Indonesia and Malaysia on pricing and supply. 3 of them accounts for about 80-85% of world rubber production. He should just stick to being a soldier and let proper qualified politicians govern.

"Tripartite arrangement with Indonesia and Malaysia on pricing and demand"

Already tried and FAILED:

2014-11-25

"Deputy Agriculture and Cooperatives Minister Amnuay Patisae promised to launch a national rubber reform program and seek cooperation from neighboring countries to increase the global rubber price.

He made the promise while receiving a complaint from growers opposing the Rubber of Thailand Bill on setting up a Rubber Organization of Thailand to manage the resource, the rubber development fund, define the powers of the Rubber Board of Thailand, and set fees for rubber export.

Mr Amnuay said the reform would cover rubber growing, operators, latex processing, rubber exports and joint rubber marketing efforts with neighboring countries.

The minister said Thailand agreed with Indonesia, Malaysia, Myanmar, Laos, Cambodia and Vietnam to increase the natural rubber price to Bt60 per kilogram in 18 months."

The unforseen problem was the continued crash in oil prices in late 2015 that reduced the need for natural rubber.

[maoro2013]

Sounds like the world price is a lot more than the price the farmers get.

Any effort to fix this problem needs to deal with the middlemen and exporters.

And don't forget the government encouraged the expansion of rubber production, giving away many free trees, which then take 7 to 8 years to mature. It is not that easy for rubber farmers to change production, and there would be certainly an unwillingness to do so after waiting 8 years for a payoff.

[halloween]

Now Eric, try not to be musteline. The words you used were "proper qualified politicians" and I wait expectantly for you to start giving examples from the PTP All-Stars.

Really not hard to see that the current lot of ministers are not in the same class as previous government except for Somkid from an incumbent past PTP related party. Worse, these present lot not even true representative of the people. Maybe that's why they find no motivation to work as they need not seek re-election.

And aren't we glad they aren't in the same class as Chalerm, Boonsong of G2G fame, Nattuwat supplying trucks to move the rice, and the highly qualified Yingluk with not a day of public service and a history of perjury.

[Srikcir]

The world price is the price, but this may lead the dangerous rubber tree growers to think there is something being done for them and may hold them off until it becomes the next administration's problem. Or they could subsidise the price as was done for rice in the recent past.

"they could subsidise the price as was done for rice in the recent past."

Actually, Prayut essentially subsidized rubber prices with the Rubber Buffer Stock program. This is apart from the several subsidies paid to farmers to lower their cost of production.

Under this program the government would buy rubber from the farmers at above market prices, ie., 60 Bt/kg, hold it in warehouses until demand drives the price higher and allowing the government to recoup its cost - similar to the Yingluck rice pledge program.

In fact subsequently the government sold to two chinese state-owned companies 400,000 tons of rubber at 60 Bt/kg that is higher than the market price of about 34 Bt/kg. This is a reasonably suspicious deal that is perhaps more motivated by foreign politics than real demand.

[halloween]

The world price is the price, but this may lead the dangerous rubber tree growers to think there is something being done for them and may hold them off until it becomes the next administration's problem. Or they could subsidise the price as was done for rice in the recent past.

"they could subsidise the price as was done for rice in the recent past."

Actually, Prayut essentially subsidized rubber prices with the Rubber Buffer Stock program. This is apart from the several subsidies paid to farmers to lower their cost of production.

Under this program the government would buy rubber from the farmers at above market prices, ie., 60 Bt/kg, hold it in warehouses until demand drives the price higher and allowing the government to recoup its cost - similar to the Yingluck rice pledge program.

In fact subsequently the government sold to two chinese state-owned companies 400,000 tons of rubber at 60 Bt/kg that is higher than the market price of about 34 Bt/kg. This is a reasonably suspicious deal that is perhaps more motivated by foreign politics than real demand.

The big difference is that the assistance is limited. They are not prepared to lose huge amounts of taxpayers' money to maintain their popularity.

[phoenixdoglover]

There is an oversupply of rubber production in Thailand because there was a global price bubble 5 years ago. A bunch of "farmers" planted rubber trees. Hell, my wife wanted me to buy land and plant rubber trees. One look at the 5 year price chart revealed the folly of that idea.

The Thai government is not going to solve this with any kind of subsidy, payment, or buying program.

However, they could reduce the magnitude of oversupply with a one time buyout of farmers who agree to stay out of the business for 3 to 5 years. Yes, this would be a reward for stupidity, but better than buying rubber and stockpiling.

As for middle men, they are not necessarily the problem. There will always be middle men. Farm cooperatives are a possible alternative, if there is actually a sustainable market (big if). Of course if the middle men are price fixing, they should be prosecuted (unlikely to happen!).

Overall my confidence in this government to manage the Thai rubber market is between nil and zero. Previous government, just as bad .

[Eric Loh]

Not a thoughtful suggestion. He should place more emphasis on R&D to expand rubber use. More importantly, he should seek cooperation from the tripartite arrangement with Indonesia and Malaysia on pricing and supply. 3 of them accounts for about 80-85% of world rubber production. He should just stick to being a soldier and let proper qualified politicians govern.

"Tripartite arrangement with Indonesia and Malaysia on pricing and demand"

Already tried and FAILED:

2014-11-25

"Deputy Agriculture and Cooperatives Minister Amnuay Patisae promised to launch a national rubber reform program and seek cooperation from neighboring countries to increase the global rubber price.

He made the promise while receiving a complaint from growers opposing the Rubber of Thailand Bill on setting up a Rubber Organization of Thailand to manage the resource, the rubber development fund, define the powers of the Rubber Board of Thailand, and set fees for rubber export.

Mr Amnuay said the reform would cover rubber growing, operators, latex processing, rubber exports and joint rubber marketing efforts with neighboring countries.

The minister said Thailand agreed with Indonesia, Malaysia, Myanmar, Laos, Cambodia and Vietnam to increase the natural rubber price to Bt60 per kilogram in 18 months."

The unforseen problem was the continued crash in oil prices in late 2015 that reduced the need for natural rubber.

You got it right and I agree that oil price crash is a problem but not the main problem. To understand the problem, it had to go back to the breakdown of the International Natural Rubber Association back in the late 90s. Soon after the 3 major natural rubber growing countries of Thailand, Malaysia and Indonesia formed the Tripartite Natural Rubber Asociation. Many talks followed after this formation to control the supply of natural government vis pricing. Talks never succeeded and Thailand went on an uncontrolled expansion of rubber plantation while Malaysia and Indonesia decrease and maintain respectively. It has now manifested into a problem due to excessive supply and demand that has not increased proportionately. Large blame on the previous governments poor understanding of the industry and farmers greed.

[rubl]

Not a thoughtful suggestion. He should place more emphasis on R&D to expand rubber use. More importantly, he should seek cooperation from the tripartite arrangement with Indonesia and Malaysia on pricing and supply. 3 of them accounts for about 80-85% of world rubber production. He should just stick to being a soldier and let proper qualified politicians govern.

Are you advising the current government to form a 'rubber' cartel ? That's against various international treaties. Maybe 'properly qualified' politicians don't care.

[sawadee1947]

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