ASEAN KEY DESTINATIONS
Rushing to rubber
The upbeat rubber market has encouraged Thailand's CP Group to strengthen its rubber business with an investment infusion from Japan's Marubeni Corporation.
The first plant, to be built this year with a capacity to make 20,000 tonnes of block rubber a year for use in the tire industry, is expected to be located in the sites of the North or Northeast.
"We'll gradually open factories near farm sites that grow our para rubber breeds," said Montri Congtrakultien, CEO of the Crop Integration Business Group (CPS).
The company will also introduce a newly developed tapping device that allows planters to tap even during rainy season and obtain higher-quality latex.
CPS, a unit of Charoen Pokphand Group, has been enjoying the current risingprices of rubber and palm oil, two businesses it started a few years ago.
It is upbeat that sales of rubber and oil palm saplings will each increase to 600,000 units this year, higher than last year's sales of 450,000 and 400,000 units, respectively.
Prices for both crops are rising so high farmers may be unsure about which crop to plant.
Prices of palm nuts rose to an average of 9.27 baht a kilogram last month, up from 4.15 baht last year. Prices of smoked sheet rubber rose to an average of 160 baht/kg in January, from 109 baht in 2010. (US$=30.7 Thai baht).
Strong fuel prices and recent natural disasters were the main causes for the price increases. "If farmers want my advice, I would suggest going for rubber since the cultivation of palm oil requires a large volume of water," said Mr. Montri.
Though rubber prices should cool in a few months due to seasonal conditions, he is confident the company's rubber breed - JVP80 - would produce higher yields to offset price dips. Even as the price for its saplings has increased by over 70 percent to 80 baht a piece, orders are accelerating with the delivery date for orders today sometime in July and August.
The rush to grow rubber has resulted in critical shortages of saplings, pushing up prices.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below