By Apornrath Phoonphongphiphat
BANGKOK, Aug 26 (Reuters) – Thai rubber farmers held a protest in a southern province on Monday and threatened national action in a bid to force the government to restart a stockpiling scheme buying rubber at above-market prices.
The government, which is spending billions of dollars supporting rice farmers, previously spent 22 billion Thai baht ($690 million) under a programme that ended in May to buy 210,000 tonnes of unsmoked rubber sheet from local farmers.
Thailand is the world’s largest producer of natural rubber. The government has said it will not resume the intervention program, which purchased the rubber sheet at 120 baht per kg, compared with a current market price of about 72 baht.
About 1,000 farmers blocked traffic in Cha-uat district in Nakhon Si Thammarat province, about 800 km (500 miles) south of Bangkok, and threatened a bigger protest.
“We and our rubber farmers’ network in the northern and other regions will block traffic across the country,” said Perk Lertwangpong, Chairman of the Thai Rubber Cooperatives of Thailand.
“Around 10,000 rubber farmers will march to Government House on September 3 to ask Prime Minister Yingluck (Shinawatra) why she doesn’t care about rubber farmers,” he said.
The global economic downturn has cut rubber demand and dragged benchmark smoked rubber sheet (RSS3) from a record high of $6.40 per kg in February 2011 to $2.80 in mid-2012. Rubber sheet was at $2.65 per kg on Monday.
Benchmark Tokyo rubber futures jumped 3 percent on Monday to 278.0 yen per kg, the highest in three months, but traders said the rise has not been reflected in cash rubber as good weather has allowed farmers to tap more latex, boosting supply.
Perk of the Thai Rubber Cooperatives said rubber farmer were angry that they had not received the same level of support as rice farmers.
Thailand has spent nearly $19 billion to buy rice at about 50 percent above market prices, building up a record 17 million tonne rice stockpile — equal to about two years of exports — which it is desperately trying to sell.
The government in July reversed a cut in the rice intervention scheme on the day it took effect, giving in to farmers who had threatened protests.
Agriculture Minister Yukol Limlaemthong on Monday again ruled out buying more rubber, noting the previous stockpiling had failed to lift prices.
“It’s impossible to buy rubber again at 120 baht. That would incur huge losses and would distort the market,” Yukol told reporters.
The government has so far given no clear indiction of what it will do with the rubber it has in storage.
($1 = 31.9200 Thai baht) (Editing by Richard Pullin)