Research for Consideration of a Policy Proposal to Reform the Natural Rubber Industry's Structure and Stabilise Farmers' Dealing Conditions in Thailand ; ERIA Research Project Report ; 2015, No. 12

In: http://hdl.handle.net/11540/10892

Abstract

Thailand, Indonesia and Malaysia together produce about 70 percent of the world's natural rubber (NR). Recently, the market for NR has been in a state of excess supply. This is because production in Cambodia, Myanmar and Viet Nam has been increasing and, after 2011, demand for NR in China has been subdued. The price has suffered a continual decline since 2011, while NR stocks in Thailand have been increasing. In order to stabilise the production environment of NR in Thailand and other Asian countries, it has become important to improve the production and distribution environment so that farmers can tolerate competitive and changing circumstances . We study the types of support for farmers that would be effective against price volatility of NR. NR is used to make medical gloves as well as tires for vehicles and aircraft. The Thai government is also considering making use of NR in new applications, such as road paving and sports tracks . This study also looks in to the possibility of increasing demand for NR through widening its various uses. This research investigates various structural issues of the Thai NR industry, from the supply/demand structure to the distribution structure and also evaluates past and present policies in order to develop policy recommendations for structural reforms aimed at raising the competitiveness of NR and mitigating the impact of price fluctuations on farmers.