Thailand to repland rubber to help market

Thailand to repland rubber to help market

Dow Jones, Bali

Thailand, the world's largest rubber producer, is considering
replanting rubber plantations in an attempt to reduce natural
rubber output and help shore up physical prices.

Since it takes seven years for rubber tapping to begin after
replanting, the program is considered a valuable tool in
controlling the output of the country's 1.99 million hectares of
rubber plantations, said Jirakorn Kosaisawee, director of the
economics division at the Rubber Research Institute of Thailand.

"We need to replant...and we should not add new planting area
(for rubber trees)," said Jirakorn Sunday evening, ahead of
meetings in Bali Monday and Tuesday involving senior rubber
officials from Thailand, Indonesia and Malaysia.

The meetings are expected to finalize plans by the world's top
natural rubber producers to form an International Tripartite
Rubber Council to manage an output cut of 4 percent and export
cut of 10 percent starting next year. A ministerial meeting
Wednesday is expected to approve these plans to help boost rubber
prices.

Benchmark Thai ribbed smoked sheet rubber 3 grade was quoted
Friday at 46-47 U.S. cents a kilogram, free-on-board for prompt
shipment, sharply down from around 65 U.S. cents per kg at same
time last year and 74 U.S. cents per kg two years ago.

The Thai Farmers Research Center Co. said in August the
country is expected to produce around 2.25 million metric tons of
rubber in 2001, up 0.4 percent from last year.

Indonesia, the second largest rubber producer, announced
earlier its intention to replant rubber plantations to help
achieve the 4 percent output cut under the tripartite agreement.
Agus Pakpahan, director-general of estate crops at the
Agriculture Ministry had said Indonesia will replant 100,000
hectares of rubber planting area in 2002. Indonesia is expected
to produce 1.41 million tons of rubber this year.

Malaysia hasn't announce any plans to replant. The country's
2001 output is expected to reach 580,000 tons.

Besides replanting, Thailand's rubber farmers should be
encouraged to diversify into other crops or grow trees for wood,
said Jirakorn. Growing more fruits, like durian, rambutan and
mangosteen, can help boost the agricultural export market, he
said. Making a switch to oil palm also would be lucrative for
farmers as Thailand still needs to import the crop to satisfy
domestic consumption, he said.