Thailand May Spend 17 Billion Baht to Boost Rubber Prices

Thailand’s government plans to spend 17 billion baht ($535 million) to buy rubber at above-market rates to boost prices, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said.

The government, through Bank for Agriculture and Agricultural Cooperatives, will provide funding worth 15 billion baht to state-run Rubber Estate Organization and grower cooperatives to buy rubber until the local price reaches 120 baht per kilogram, Kittiratt told reporters today. The plan will be sent for Cabinet approval next week.

State-owned Bank for Agriculture will separately extend another 2 billion baht to farmer cooperatives for purchasing rubber above the market rates, Kittiratt said.

The plan is aimed at bolstering domestic prices after a 29 percent slump last year. Higher Thai prices could extend gains on rubber futures, which have risen 10 percent this year.

“The appropriate and sustainable level for rubber is 120 baht per kilogram,” Agriculture Minister Theera Wongsamut said to reporters today in Bangkok.

The June-delivery contract advanced 3.8 percent to 291 yen a kilogram ($3,796 a metric ton) on the Tokyo Commodity Exchange, the highest settlement price for a most-active contract since Dec. 8.