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Trade
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2007-10-14 22:34:33-04
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Baht rise forces rubber importers to buy from Indonesia
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BANGKOK, Oct 13 - Thailand's strengthening baht has forced natural rubber importing countries to switch to purchasing from Indonesian suppliers instead, causing a slump in Thai rubber exports this year compared to 2006, according to a report issued by the Kasikorn Research Center.
The stronger baht is bad news for Thai rubber producers and exporters, the report said, and worse yet, the leading think tank sees Indonesia overtaking Thailand as the world's leading producer and exporter of natural rubber in coming years. The report said prices of Thai natural rubber have risen higher than those of Indonesia, Thailand's major competitor, and that importers in other countries have turned to buy rubber from Indonesia. In addition, Malaysia has reduced its imports of Thai rubber latex as its production now satisfies domestic demand. Kasikorn said exports of natural rubber by Thailand, the world's largest natural rubber producer, will meet stiffer competition in the global market in the next few years, especially from Indonesia and Malaysia as their new rubber plantations have begun to produce yields.
The expected new yields will be seen in both rising volume and price cutting practices. Currently, Indonesia and Malaysia rank second and third respectively in the world in terms of largest natural rubber producers. The global demand for natural rubber now stands at about eight million tonnes while production and consumption annual growth is estimated at 4.1 and 3.7 per cent respectively, according to the report. Production of natural rubber in 2010 is expected at 10.42 million tonnes, slightly less than the demand level.
It is projected that demand for natural rubber in the next 13 years in Asia, especially by India and China, will rise tremendously. It is also forecast that Indonesia would by then become the world's largest producer and exporter, replacing Thailand, according to the report.
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