Rubber cutback draws backing from producers
THAILAND and fellow rubber producers Indonesia and Malaysia are serious on the implementation of the industry’s Agreed Export Tonnage Scheme (AETS) during the first quarter of this year, Thai Agriculture and Cooperatives Minister Grisada Boonrach said.
He said Thailand is the world’s biggest producer and exporter of natural rubber. Due to depressed prices, Thailand, Indonesia and Malaysia agreed to implement the AETS that involves a cut in supply of 350,000 tonnes. The implementation of the scheme by the International Tripartite Rubber Council (ITRC) will immediately decrease natural rubber supply from the global market, the minister said.
In order to achieve the objective of the AETS, ITRC member countries will be subject to these measures:
l Thailand will be governed by the Rubber Control Act B.E. 2542 (A.C. 1999). In addition, the Government Gazette on the AETS implementation was announced on 10 January;
l AETS in Indonesia will be implemented by Gabungan Perusahaan Karet Indonesia and the Ministry of Trade of Indonesia; and
l AETS in Malaysia will be governed by that country’s Rubber Price Stabilisation Act 1975 under Malaysian Rubber Board.
The ratio of export cutback is based on the natural rubber production shares in ITRC member countries. Under this implementation, the total quantum of export cutback of 234,810 tonnes has been given to Thailand.
Gridasa has expressed his confidence on the seriousness of the AETS implementation by the ITRC, which will give a positive impact on prices in the global market.
On top of that, ITRC member countries are targeting to further increase their domestic consumption. In fact, Malaysia is one of the leading natural rubber manufacturing countries, particularly with its rubber gloves industry. In the meantime, Thailand is exploring ways to improve innovation and increase domestic consumption, Gridasa said.
For 2018, Thailand aims to use an additional 200,000 tonnes of rubber for government projects such as rubberised road, sport fields mats, pavement rubber block, pond liner, rubber pillows and rubber mattresses.
Other than the implementation of AETS, the Cabinet has approved some supportive measures:
l Soft loans for natural rubber processors and exporters (dried rubber) of up to Bt20 billion. For this measure the government will subsidise interest of not more than 3 per cent per annum; and
l Increasing the use rubber in government agencies with the target of 200,000 tonnes;
l It will be open to any complaints and suggestions from exporters and processors
The minister reiterated that he is open to feedback from exporters and processors who are affected by the implementation of AETS.
With regard to the negative impact on the AETS implementation, the Agriculture and Cooperative Ministry (MOAC) will cooperate with Ministry of Commerce to investigate natural rubber stocks and find the appropriate and fair cost of production for entrepreneurs who submitted their cases to MOAC.
