BANGKOK, May 11 (Reuters) – Thailand’s Sri Trang Agro Industry Pcl, the world’s biggest natural rubber producing company, said on Thursday it expected sales to be between 1.3 million and 1.7 million tonnes in 2017, compared with 1.7 million forecast in January.
Rubber prices are expected to be volatile while China’s economy remains uncertain, Veerasith Sinchareonkul, a company executive director, told a news conference.
“It’s difficult to predict rubber prices this year because of volatile commodity prices, especially oil prices. They also depend on China’s economy as it’s a big consumer,” he said.
However, prices should be higher than they were over past few years due to higher demand and tighter supply, said Paul Sumade Lee, also an executive director.
The company plans to hedge 30 percent of its rubber output in 2017, similar to last year, Veerasith said.
Sri Trang exports 49 percent of its product to China, 27 percent to Southeast Asian countries, 5 percent to the United States, 4 percent to Europe and keeps the rest of its output for domestic use, the firm said.
Last year, the firm sold 1.5 million tonnes of rubber.
The company plans to spend 1 billion to 2 billion baht ($28.78 million to $57.55 million) to build a new plant in Thailand and increase production in Indonesia, he said.
Sri Trang plans to increase production capacity to 2.9 million tonnes this year, up from 2.7 million forecast in January, and against 2.4 million in 2016, Veerasith said.
The increase in production capacity will help it raise its market share to 20 percent over the next few years from 12 percent last year, he said.
($1 = 34.75 baht)
(Reporting by Wirat Buranakanokthanasan; Writing by Orathai Sriring; Editing by Christian Schmollinger)
