Thailand plans to boost the natural rubber market by buying 250,000 mt of the commodity by March, news reports said Thursday, citing deputy farm minister Yuttapong Charasathien.
Since May to date, the Thai government has bought about 170,000 mt of natural rubber from local farmers, Charasathien said.
The approximate total of 420,000 mt represents about 12% of the 3.57 million mt of natural rubber that Thailand produced in 2011.
The country is the leading producer of natural rubber in the world.
The purchases will be funded by a Baht 30 billion ($967 million) plan that was approved by the Thai government in mid-September to buy about 300,000 mt of natural rubber.
The September-approved plan follows a Baht 15 billion plan approved by the Thai cabinet earlier this year to buy about 100,000 mt of natural rubber.
Since October 1, the International Tripartite Rubber Council, comprising Thailand, Indonesia and Malaysia, have started a plan to cut exports by 300,000 mt until end-March 2013.
Indonesia and Malaysia rank behind Thailand among the top three global producers of natural rubber.
The ITRC plan, labeled the Agreed Export Tonnage Scheme, or AETS, calls for Thailand to cut exports by 150,000 mt, Indonesia by 100,000 mt and Malaysia by 50,000 mt.
Over Q4, about 180,000 mt, or 60%, of the planned cuts will be shared proportionately by the three countries. The 60% cut will be spread equally over the quarter at 60,000 mt/month.
Under the AETS, the three countries will also implement a replanting program for 100,000 hectares of rubber trees, which will result in a further reduction of exports by 150,000 mt. In total, 450,000 mt of natural rubber will be taken out of the supply chain from the three countries.
Thailand, Indonesia and Malaysia account for about 70% of the world's natural rubber production.
