Roundup: Thai gov't opts for direct purchase of 100,000-ton rubber from planters

The Thai government decided on Tuesday to place direct purchase of 100,000 tons of rubber from planters nationwide in a bid to alleviate their plight caused by a drastic, chronic decline in the rubber prices.

Thai Premier Prayut Chan-o-cha resolved to have government agencies buy newly-produced rubber directly from the planters in all regions of the country, but it remains to be seen how much the purchase price will be.

Prayut said the government might probably offer to buy at a price "slightly higher" than the current average price in the domestic market which has been lowered to 25 baht (about 69 U.S. cents) per kilogram.

He dismissed persistent calls from the rubber planters for an increase in the rubber price to 1.6 U.S. dollars a kilo and said the government did not have that much money to buy.

The rubber planters earlier claimed their producing cost amounted up to 1.8 U.S. dollars a kilo, however.

According to the premier, the Thai rubber has largely oversupplied the world market, given fierce competition with those from Indonesia and Malaysia.

Thailand produces an estimated 4 million tons of rubber a year, about 1 million tons of which is used within the country and the rest is destined for export to the world market, mostly to China.

Besides its latest plan to buy 100,000 tons of rubber from the planters, the government currently has some 400,000 tons of rubber in stock, which is yet to be released to the markets.

Several portfolios of the government will buy the planters' rubber with their respective budget and without dealers in the domestic market and will find ways and means to promote uses of rubber in the country.

Those government agencies assigned by the Prayut cabinet to directly buy the rubber from the planters include the Ministry of Transport which plans to use rubber in the making of tires for automobiles and the construction of roads in mixture with asphalt while the Ministry of Public Health plans to use rubber in the making of gloves and medical equipment, among others.

The Prayut government repeatedly called on the rubber planters, particularly those in the southern region of the country, to cultivate alternative plants apart from rubber trees to alleviate their losses in rubber production.

Meanwhile, an ad hoc committee is being set up by the government to address problems related to the rubber prices and surpluses on integrated basis.

Representatives of rubber planters will sit on the panel alongside those from government units, industrial sector and traders.

The setting up of the rubber committee was apparently designed to keep the southern planters from gathering at public places or on the road to air their grievances over the lowered rubber price.

No group of southern rubber planters was reported as yet to shrug off the government's warning against possibly organizing protest anywhere. Enditem