BANGKOK, 23 October 2014 – Industry Minister Chakramon Phasukvanich on Wednesday expressed confidence that the government’s short- and long-term measures to address the low rubber price will be successful.
Mr. Chakramon said that the government will be removing excess rubber from the market during November and April, when vast amounts of rubber reach the market, as part of its urgent phase measure to address the rubber price. This will be achieved by having six banks providing loans to latex processing businesses to buy the excess rubber. The interest rate for such loans will be two percent for the lender, as the government will compensate the banks with another three percent. This measure is expected to remove 200,000 tons of latex from the system and result in an immediate increase of rubber price by 2-3 baht per kilogram. The aim is to achieve a rubber price of 66 baht per kilogram.
For the long-term, the government is collaborating with the Government Savings Bank to lend a total of 15 billion baht to rubber processing businesses so the latter would increase their output and improve on their machineries. Borrowers will pay interest equivalent to the rate for savings; the government will pay the remaining three percent to the GSB. Nine businesses have already applied for 7.6 billion baht of the loan. This scheme is expected to increase domestic rubber usage by 300,000 tons per year.
