Monthly Rubber Situation in Thailand - February 2014

Wintering season has began in lower south of Thailand, extending from Songkhla to Sungai Kolok. Tapper also started their tapping holiday. This year, the drought is heavier, longer and earlier than last year, causing rivers to turn dry. As a result, NR output is low. However, rubber prices rebound as buyers expected earlier that long drought would disrupt rubber supply, therefore bought huge amount to stockpile.

With high supply in the market due to the increase of acreage during last 7-8 years in the same way with neighbouring countries, Thai exports in the 1st and 2nd quarter are affected. Those new plantations are now under tapping. Meanwhile, demand doesn’t grow in consistency with the production. Rubber prices are falling. This condition will continue until the economy of China, European Union and USA improves.

In terms of automotive, domestic automotive industry is worrisome as the political uncertainty gives negative outlook to foreign investors. Thailand was once the biggest production and export base of automotive in South East Asian region. At present, certain automobile manufacturers shifted their production base to Indonesia.