Thailand, Indonesia and Malaysia to Reduce Shipments of Rubber by 615,000 Tons
BY JACOB MASLOW



BANGKOK: -- Thailand, Indonesia and Malaysia have come to an agreement on Thursday to reduce the amount of natural rubber shipments in all three countries by 615,000 tons for a duration of six months. The reduction will begin in March, and is an effort to reduce supply and boost prices that have now reached a near six year low.

The three countries combined produce 60% of the global output of natural rubber, and according to the Rubber Authority of Thailand, Thailand will account for 50% of the total cuts. A joint statement was released by the three countries to address the falling rubber prices.

Malaysia will reduce its rubber production by 52,260 tons, Indonesia will reduce its rubber output by 238,740 tons, and Thailand will cut its exports by 324,000 tons.

Full story: http://ethailand.com/business-news/thailand-indonesia-and-malaysia-to-reduce-shipments-of-rubber-by-615000-tons/1499/

-- eThailand 2016-02-05

Shouldn't be too hard for Thailand to reduce it's rubber production as very shortly with the advent of the hot season rubber tapping ceases anyway. To tap tress in the hot, dry season seriously damages them. Tapping ceases until the beginning of the monsoon a period of about 4-5 months.

I should imagine the same applies to Malaysia, I don't know about the weather patterns in Indonesia.

Thailand, Indonesia and Malaysia agree to reduce the amount of natural rubber shipments in all three countries by 615,000 tons for a duration of six months as an effort to reduce supply and boost prices.

Previously:

- Thailand agreed with Indonesia, Malaysia, Myanmar, Laos, Cambodia and Vietnam to increase the natural rubber price to Bt60 per kilogram in 18 months. 2014-11-25

- a meeting was held of Indonesia, Malaysia and Thailand to set up measures to maintain rubber price stability. One of the measures suggested was for the three countries to not expand their respective rubber plantation area for the time being in order to reduce supply. They will also slow down rubber exports. 2014-12-12

Didn't work so well. Maybe there are factors beyond the control of the triumvirate that affect world prices, like price of oil and collapsing economies!

Meanwhile, Prayut reverses himself by expanding the government stockpile of rubber:

"During the period of January 25th to January 30th [2016], approximately 100,000 tons of rubber will be sold to the Rubber Authority of Thailand."

In contrast to Prayut's short-term solution to increase rubber prices, his Deputy PM for Econ omic Affairs Somkid indicated that "a long-term solution must quickly be implemented." Somkid looked to promoting the use of rubber in the industrial sector, increasing the production of processed rubber and setting up more rubber-processing factories" (2016-01-15). The latter two would likely be aimed at reducing the production cost of rubber, enabling profitability at lower market prices. A strategy contray to Prayut's policy.

Consistently Prayut's economic strategies seem all about the quick result - perhaps to maximize the junta's political agendas? While Somkid is focused more on permanent, long-term economic restructuring to produce a politically neutral, sustainable rubber industry. With such a contrast, neither can succeed.

Edited February 5, 201610 yr by Srikcir