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Rubber Markets 2007 Domestic Prices Influencing the Export Sector

Rubber Markets 2007 Domestic Prices Influencing the Export Sector. Presented by Yium Tavarolit Chief Secretary and Economist International Rubber Consortium Limited (IRCo) Sheraton Towers, Singapore 31 October 2007.

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Rubber Markets 2007 Domestic Prices Influencing the Export Sector

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  1. Rubber Markets 2007Domestic Prices Influencing the Export Sector Presented byYium TavarolitChief Secretary and EconomistInternational Rubber Consortium Limited (IRCo)Sheraton Towers, Singapore31 October 2007

  2. The scenario of Thailand’s rubber production due to external factors in today’s context (what could possibly happen at present?) Introduction

  3. The Map of Thailand with Locations of Rubber Plantation

  4. Table 1. Planted area, production of natural rubber in Thailand, 2000 – 2005 Source: 4th ITRC Stat. Committee

  5. Introduction (cont.) • Earnings of natural rubber accounted for 346.72 billion baht (US$ 10.2 billion) in 2006 • Value creation of agricultural products is one of conceptual development framework for the 10th National Economic and Social Development Plan (10th NESDP: 2007 - 2011)

  6. National Policy on Natural Rubber Recognizing the importance of the rubber products industry as a one of potential industry and support the development of rubber products industry in five areas as follows:- • Natural rubber becomes one of the most important cash crops of Thailand • Continuingly increase in supply and demand for world natural rubber in response to expanding demand for world’s transportation and rising oil prices

  7. National Policy on Natural Rubber (cont.) • Constructing the well - established and strong rubber products industry and business and aiming for the Asia’s largest rubber producer by giving more emphasis on strengthening of technology, especially by providing incentives fro import of new and more efficient machinery and technology, transfer of technology to Thai personnel and establishment of R&D programs • Encouraging and providing budget for R&D in productivity from upstream to downstream to the universities and research institutes • Speeding up technology licensing and transfer from aboard

  8. National Strategic Development of Rubber Products Industry and Business for Medium and Long - Term 1st: Increasing Sufficient Quality Supply of Natural Rubber Raw Materials • Productivity improvement of raw materials • Creating pioneer farming zones to maximize productivity and efficient supply to the rubber industry • Transferring necessary agricultural knowledge and technology to rubber smallholders, and • Providing suitable agricultural inputs, and managing supply of raw materials in sufficient quantities to meet industrial demand

  9. 2nd: Development of Science and Technology • Supporting research on modifying and improving existing technology in SMEs • Supporting knowledge transfer to the private sector to create skilled knowledge • Promoting public and private latex Bio – tech R&D investment • Building strong research community • Enhancing the capacity of private and public research institutes and university to support SMEs • Creating intellectual property with value in the commercial market

  10. 3rd: Competitiveness and Capacity Enhancement • Enhancing efficiency in existing agencies concerned to coordinate networks • Adjusting production processes and methods to make them more efficient and higher quality • Enhancing efficiency in output distribution by improving marketing system at all levels and promoting e – commerce • Developing product quality standard systems to meet international standards • Promoting sustainable rubber production process • Supporting establishment of The Rubber Board of Thailand

  11. 4th: Establishment of Supportive Infrastructure • Reviewing and revising laws and regulations, which are barriers to the private sector for stimulating the upgrading of their production technology. • Promoting and stimulating demand for made-in-Thailand rubber products by government procurement agencies and so on • Accelerating logistics system development master plan • Establishing rubber products standards and test centers • Promoting the use of regional economic and technical cooperation bodies to expand rubber markets Sources: NESDB, Thailand and IRCo, September 2007

  12. Table 2. Natural Rubber Production, Exports, Domestic Consumption, Stocks, and Imports of Thailand, 1996 - 2006 Source: RRIT, Thailand

  13. Table 3. Natural Rubber Production of Thailand by Types, 1996 - 2006 Unit: '000 tons Source: RRIT, Thailand

  14. Table 4. Natural Rubber Exports of Thailand by Types, 1996 - 2006 Unit: '000 tons Source: RRIT, Thailand Note: * Dry Rubber Content

  15. Table 5. Exports of RSS of Thailand by Grades, 1996 - 2006 Unit: '000 tons Source: RRIT, Thailand

  16. Table 6. Exports of TSR of Thailand by Grades, 1996 - 2006 Unit: '000 tons Source: RRIT, Thailand

  17. Table 7. Exports of Other Types of Natural Rubber of Thailand, 1996 - 2006 Unit: '000 tons Source: RRIT, Thailand

  18. Table 8. Imports of Thai Natural Rubber by Countries, 1996 - 2006 Unit: '000 tons Source: RRIT, Thailand

  19. Table 9. Exports of Thai Natural Rubber by Ports/Customs Houses, 1996 - 2006 Unit: '000 tons Source: RRIT, Thailand

  20. Table 10. Value of Natural Rubber Exports of Thailand by Types, 1996 - 2006 Unit: Million Baht Source: RRIT, Thailand

  21. Table 11. Natural Rubber Consumption of Thailand by Types, 1996 - 2006 Unit: '000 tons Source: RRIT, Thailand

  22. Table 12. Natural Rubber Consumption of Thailand by Types of Products, 2003 - 2006 Unit: '000 tons Source: RRIT, Thailand

  23. Table 13. Export Value of Natural Rubber Products of Thailand, 2004 - 2006 Unit: Million Baht Source: RRIT, Thailand

  24. Natural Rubber Prices in Thailand, 1996 – 2007 The Fall: 1996 – 2001 • The global economic slowdown • Less bargaining power of NR producing countries despite firm global economy in some years • Low prices of synthetic rubber • Asian economic crisis in mid-1997 • The overhang of Thai government stockpile • The demise of INRO in 1999

  25. The Rise: 2002 – 2007 • The global economy has rebounded steadily to the present • Higher demand for rubber from China, India, and the emerging economies • Higher prices of synthetic rubber due to rising oil prices • Erratic weather and more natural disasters due to the global climate change • Establishment of Tripartite rubber cooperation among Thailand, Indonesia and Malaysia (ITRC and IRCo)

  26. Table 13. Natural Rubber Prices of Thailand, 1997 - 2007* Source: RRIT, Thailand Note: * * Average of Jan - Sep 2007

  27. Figure 1. Natural Rubber Prices of Thailand, 1997 - 2007* Note: * Average of Jan - Sep 2007

  28. Table 14. Tokyo and Singapore Rubber Futures Markets Source: RRIT, Thailand Note: * * Average of Jan - Sep 2007

  29. Figure 2. Tokyo and Singapore Rubber Futures Markets Note: * Average of Jan - Sep 2007

  30. The Future: ?????

  31. Conclusion The balance of supply and demand for natural and synthetic rubber will lead to a sustainable development of the rubber industry, and the physical rubber market should be strengthened in order to lower rubber prices’ volatility.

  32. Thank you for your attention

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