Thailand plans to spend about Baht 15 billion ($472 million) to boost local natural rubber prices to about Baht 120/kg, local media reported Tuesday.
The plan first emerged on January 10, after rubber farmers in southern Songkhla province announced their plans to go to Bangkok and collectively urge the government to support rubber prices.
Initially, the plan was to spend Baht 10 billion to support the domestic rubber industry.
The National Rubber Committee agreed Tuesday to intervene in the market and set a floor price of Baht 120/kg, reports said, citing Theera Wongsamut, minister of agriculture and cooperatives. Prices stood at Baht 98/kg on Tuesday.
The funds will come from the state-run Bank for Agriculture and Agricultural Cooperatives and rubber stocks will be used as collateral. The bank will extend another Baht 2 billion to farming cooperatives for the purpose of buying rubber above market rates.
On January 24, the proposal will be sent to the Thai cabinet for approval.
In 2011, Thailand produced about 3.4 million mt of natural rubber, or nearly 34% of the 10.1 million mt made by members of the Association of Natural Rubber Producing Countries, estimates from the association showed.
The ANRPC comprises Thailand, Indonesia and Malaysia -- the top three producers -- Cambodia, China, India, Papua New Guinea, the Philippines, Singapore, Sri Lanka and Vietnam.
