Rubber Sapling Prices Too High, Thai’s Ministry Told

The Thai’s Agriculture Ministry has been asked to cut its proposed prices for rubber saplings as part of a programme to expand rubber plantations in the country.
The Natural Rubber Committee, chaired by Deputy Prime Minister Suthep Thaugsuban, last month approved an increase in sapling prices to 25 baht each from 18 baht.
The government plans to supply saplings free of charge to farmers in order to expand rubber plantation areas by 128,000 hectares over the next three years. The scheme would cost 3.9 billion baht.
The ministry has since asked the committee to approve a price of 30 baht per sapling.
"The proposed rubber sapling price is quite high," said Mr Suthep, who has asked the ministry to propose a new price late this month.
Rubber is trading at record highs amid strong global demand led by China's booming automobile and tyre industries. More farmers are interested in switching to the crop in the expectation that high prices will continue. A rubber tree takes seven years to mature.
Deputy Agriculture Minister Supachai Phosu said the market price of rubber saplings was currently 35-40 baht apiece.
"We fear that there will be no bidders as the reference price is lower than the market price. Moreover, the ministry plans to decrease sapling supplies to farmers to only 500 units per hectare from 562.5 previously," he added.
Based on 500 saplings per hectare, a ministry projection showed that 475 would be planted with 25 kept in reserve in case of any damage. Based on 475 saplings per hectares, the total supply would be 64 million with a budget of 1.6 billion baht.
(Bangkok Post, Thailand, March 5, 2011)