While the local rice market is mired in a deep slump due to oversupply, the rubber trade has begun to pick up, with foreign buyers now seeking to buy directly from planters and bypassing the futures market.
Foreign buyers have bypassed the futures market and bought rubber directly from Thai planters for two years.
Representatives from rubber-processing companies from Malaysia, China and India have been in direct contact with the Rubber Network Council and Rubber Farmers Institution of Thailand (RNRF) since rubber prices started to dip over a year ago, RNRF communications officer Veerasak Sinthuwong said on Saturday.
“They want to buy directly from farmers due to a large price gap compared to what’s quoted in the futures market,” he said.
The foreign buyers first headed south, hoping to buy from rubber companies and large farmers’ groups there, but were told the supply was not enough.
They subsequently turned to Indonesia but found the quality of cup rubber in the neighbouring country did not meet their requirements.
They finally turned to planters in the Northeast through their network. The prices have been set based on prevailing market rates plus management fees and a profit margin.
“There’s no limit to how much these companies would buy and official talks will be held again next month,” he said.
Rubber companies are now competing hard for supply, offering one baht more for a kilogramme each day. The price of 100% cup lump is now 51-52 baht a kg while raw cup lump is sold for 21-32 baht and latex from the south for 56 baht.
“From February next year, we should see rubber prices rebound to 75-80 baht a kg. Planters in the South, Northeast and some parts of the Central region have seen that trend and are telling their network members to hold it for sale by then,” he said.
