The Thai military government has approved the sale of the country’s large rubber stocks and is in negotiations with potential buyers, a senior government official said Monday.
Chanachai Plengsiriwat, director of the Rubber Estate Organization, said the junta last week approved the release of the natural-rubber stocks. It didn’t specify the quantity that would be sold, he said.
The first lot under negotiation, however, “should be at least half of the stock,” or 100,000 metric tons, he said in a phone interview.
The Thai government’s rubber stockpile stands at around 208,000 tons. Mr. Chanachai said the rubber would be sold at a loss compared with its cost, which totaled 22 billion Thai baht ($689 million).
The stockpile was built up under state-funded price-support programs implemented by the former civilian government, which included buying rubber at above-market rates to support rural incomes—a move that mirrored the nation’s rice subsidy program.
Natural-rubber prices have fallen more than 60% from their February 2011 peak. Thailand, the world’s largest producer and exporter of the commodity, had tried various ways to boost prices for farmers but to no avail, as global supply outstripped demand for several years.
The program’s expenses have also taken their toll.
“The stock of rubber has been a huge burden for us. Various costs have been involved, such as insurance, warehouse rent, maintenance and soon. We have tried every possible way to shore up prices but they never rose,” Mr. Chanachai said.
The planned sale of the stockpile was unveiled in early May, weeks before the coup d’etat changed the country’s political landscape.
Earlier this month, the Thai government resumed selling rice from a large stockpile that the previous government accumulated under a program that involved buying the commodity at above-market rates to boost farmers’ incomes.
– WSJ
