Academics have urged Thailand to increase local usage of rubber from 13 per cent to 20 per cent within five years for increases in the value chain and more job creation, while suggesting that the government accelerate promotion of the rubber-processing industry.
Speaking at a seminar on “Thai Rubber Industry’s Future and the ASEAN Rubber Centre” yesterday, Aat Pisanwanich, dean of the University of the Thai Chamber of Commerce’s faculty of economics, said Thailand could become a rubber centre for Asean. He pointed to the country’s annual rubber production of 3.6 million tonnes, the rubber-growing area of 19 million rai (3 million hectares) and rubber exports of about Bt50 billion to Bt60 billion per year.
However, constraints remain due to Thailand’s limited local usage of rubber, which results in high dependency on uncontrollable export markets and the global economic situation, Aat said. Of the total annual production of 3.6 million tonnes, about 87 per cent is exported.
To ensure long-term stability of the rubber price, the country needs to raise its local usage from 13 per cent or 500,000 tonnes per year to 20 per cent or 800,000 tonnes per year in five years, Aat said.
If the local usage of rubber rises to the five-year target, the rubber-industry value chain will increase from Bt900 billion to Bt1.7 trillion with more than 200,000 jobs created, while exports of rubber products and rubber processing products will rise from Bt50 billion to Bt80 billion per year, he said. If combined with extended industries of rubber processing and production, the value chain could rise by Bt900 billion to Bt2.3 trillion.
However, if Thailand does not accelerate its local usage, Malaysia could gain advantages from rubber processing, as its local rubber usage of about 33 per cent of its total production, Aat said. Malaysia’s production of rubber gloves for export is worth about Bt36 billion per year and accounts for 50 per cent of total rubber-glove production across the globe.
“Thailand’s rubber development strategy will end this year. It failed to raise local rubber usage to 17 per cent of total production,” Aat said, adding that if local usage could rise to 20 per cent, the world price of the commodity would rise.
Aat said there remained 10 challenges for Thailand to become an ASEAN rubber centre or the global rubber centre. They are: production costs; the success of Thailand’s rubber strategy, which should focus on more local usage; clarity in the drafting of legislation governing the rubber industry; clarity in tax collection; price volatility; production of Cambodia, Laos, Myanmar and Vietnam; promotion of the rubber-processing industry; incentives for producers and rubber-processing operators; zoning and linkage for rubber-growing areas; and the “Rubber City” policy.
Agriculture Minister Yukol Limlaemthong said specialised financial institutions had set aside funds to extend loans to the private sector for rubber processing, according to the National Rubber Policy Committee’s approval of Bt15 billion in loans.
Thailand’s annual rubber usage is expected to double from 500,000 tonnes to 1 million tonnes in no less than six months.
Thai Rubber Latex Corporation president Vorathep Wongsasuthikul suggested that Thailand develop rubber growers with actual costing and pricing and a spot market to become the ASEAN rubber centre.
To have rubber prices move along with the market mechanism, the Agricultural Futures Exchange of Thailand for rubber should be developed to set a benchmark for rubber prices, he said.
Source: nationmultimedia.com
