Yium Tavarolit Chief Secretary and Economist International Rubber Consortium Limited (IRCo)...

Presented by

Yium TavarolitYium Tavarolit

Chief Secretary and EconomistChief Secretary and Economist

International Rubber Consortium Limited (IRCo)International Rubber Consortium Limited (IRCo)

Sheraton Towers, Singapore31 October 2007

Rubber Markets 2007Rubber Markets 2007

Domestic Prices Influencing the Export SectorDomestic Prices Influencing the Export Sector

2

The scenario of Thailand’s rubber production The scenario of Thailand’s rubber production due to external factors in today’s context due to external factors in today’s context (what could possibly happen at present?)(what could possibly happen at present?)

Introduction

3

Northern Part

2 Chiang Mai

3 Chiang Rai

12 Phitsanulok

Northeastern Part

21 Nong Khai

20 Udon Thani

41 Burirum

Central Part

29 Kanchana Buri

45 Ratcha Buri

Eastern Part

58 Rayong

59 Chantha Buri

Southern Part (East Coast)

65 Surat Thani

69 Nakhornsi Thammarat

73 Songkhla

Southern Part (West Coast)

67 Krabi

70 Trang

The Map of Thailand with Locations of Rubber Plantation

4

Year

Planted Area ('000 ha)Production

(tons)Yield

(kg/ha/yr)Mature Immature Total

2000 1,523,899 463,331 1,987,230 2,377,789 1.563

2001 1,523,407 466,867 1,990,274 2,561,120 1.681

2002 1,553,214 450,462 2,003,676 2,631,605 1.694

2003 1,601,353 416,854 2,018,207 2,860,966 1.788

2004 1,656,686 417,244 2,073,930 3,005,091 1.813

2005 1,691,588 488,129 2,179,717 2,974,832 1.756

Table 1. Planted area, production of natural rubber in Thailand, 2000 – 2005

Source: 4th ITRC Stat. Committee

5

Introduction (cont.)

Earnings of natural rubber accounted for 346.72 billion baht (US$ 10.2 billion) in 2006

Value creation of agricultural products is one of conceptual development framework for the 10th National Economic and Social Development Plan

(10th NESDP: 2007 - 2011)

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National Policy on Natural Rubber

Recognizing the importance of the rubber products industry as a one of potential industry and support the development of rubber products

industry in five areas as follows:-

Natural rubber becomes one of the most important cash crops of Thailand

Continuingly increase in supply and demand for world natural rubber in response to expanding demand for world’s

transportation and rising oil prices

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National Policy on Natural Rubber (cont.)Constructing the well - established and strong rubber products

industry and business and aiming for the Asia’s largest rubber producer by giving more emphasis on strengthening of

technology, especially by providing incentives fro import of new and more efficient machinery and technology, transfer of

technology to Thai personnel and establishment of R&D programs

Encouraging and providing budget for R&D in productivity from upstream to downstream to the universities and research

institutes

Speeding up technology licensing and transfer from aboard

8

National Strategic Development of Rubber Products National Strategic Development of Rubber Products Industry and Business for Medium and Long - TermIndustry and Business for Medium and Long - Term

1st: Increasing Sufficient Quality Supply of Natural Rubber Raw Materials

Productivity improvement of raw materials

Creating pioneer farming zones to maximize productivity and efficient supply to the rubber industry

Transferring necessary agricultural knowledge and technology to rubber smallholders, and

Providing suitable agricultural inputs, and managing supply of raw materials in sufficient quantities to meet industrial

demand

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2nd: Development of Science and Technology

Supporting research on modifying and improving existing technology in SMEs

Supporting knowledge transfer to the private sector to create skilled knowledge

Promoting public and private latex Bio – tech R&D investment

Building strong research community

Enhancing the capacity of private and public research institutes and university to support SMEs

Creating intellectual property with value in the commercial market

10

3rd: Competitiveness and Capacity Enhancement

Enhancing efficiency in existing agencies concerned to coordinate networks

Adjusting production processes and methods to make them more efficient and higher quality

Enhancing efficiency in output distribution by improving marketing system at all levels and promoting e – commerce

Developing product quality standard systems to meet international standards

Promoting sustainable rubber production process

Supporting establishment of The Rubber Board of Thailand

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4th: Establishment of Supportive Infrastructure

Reviewing and revising laws and regulations, which are barriers to the private sector for stimulating the upgrading of

their production technology.

Promoting and stimulating demand for made-in-Thailand rubber products by government procurement agencies and so

on

Accelerating logistics system development master plan

Establishing rubber products standards and test centers

Promoting the use of regional economic and technical cooperation bodies to expand rubber markets

Sources: NESDB, Thailand and IRCo, September 2007

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Table 2. Natural Rubber Production, Exports, Domestic Consumption, Table 2. Natural Rubber Production, Exports, Domestic Consumption, Stocks, and Imports of Thailand, 1996 - 2006Stocks, and Imports of Thailand, 1996 - 2006

Year

Production Exports Domestic

ConsumptionStocks Imports

'000 tons

% (+/-)'000 tons

% (+/-)'000 tons

% (+/-)'000 tons

% (+/-)'000 tons

% (+/-)

1996 1,970 - 1,763 - 174 - 148 - 1 -

1997 2,033 3.17 1,837 4.21 182 4.81 159 7.93 - -

1998 2,076 2.13 1,839 0.12 186 2.39 210 31.48 - -

1999 2,155 3.79 1,886 2.55 227 21.75 251 19.71 - -

2000 2,346 8.91 2,166 14.83 243 6.89 189 -24.80 - -

2001 2,320 -1.15 2,042 -5.73 253 4.35 213 12.92 - -

2002 2,615 12.74 2,354 15.30 278 9.98 197 -7.66 1 -

2003 2,876 9.98 2,573 9.30 299 7.31 202 2.83 2 26.50

2004 2,984 3.77 2,637 2.47 319 6.68 233 14.99 2 3.99

2005 2,937 -1.58 2,632 -0.18 335 5.02 204 -12.17 2 -10.55

2006 3,137 6.80 2,772 5.29 321 -4.11 250 22.34 1 -24.04

Average Annual Growth

4.86 4.82 6.51 6.76

Source: RRIT, Thailand

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Table 3. Natural Rubber Production of Thailand Table 3. Natural Rubber Production of Thailand by Types, 1996 - 2006by Types, 1996 - 2006

Year RSS STR Conc.

Latex *Crepe Others Total

1999 1,154 623 300 3 73 2,155

2000 1,124 827 292 9 94 2,346

2001 928 858 464 12 58 2,320

2002 1,100 967 471 13 64 2,615

2003 1,237 1,035 489 9 106 2,876

2004 1,283 1,074 507 9 110 2,984

2005 1,028 1,233 602 9 65 2,937

2006 1,035 1,192 722 3 185 3,137

Proportion(%)

41.59 36.56 18.00 0.31 3.54 100


Unit: '000 tons

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Table 4. Natural Rubber Exports of Thailand by Types, Table 4. Natural Rubber Exports of Thailand by Types, 1996 - 20061996 - 2006

Year RSS STR Conc.

Latex *Others Total

1996 1,180 324 203 56 1,763

1997 1,095 456 225 60 1,837

1998 1,047 480 246 66 1,839

1999 1,071 541 217 57 1,886

2000 1,006 808 285 67 2,166

2001 870 763 348 61 2,042

2002 1,050 829 382 93 2,354

2003 1,150 913 409 102 2,573

2004 1,003 998 493 143 2,637

2005 921 1,109 489 113 2,632

2006 939 1,069 556 207 2,772

Proportion (%) 46.25 33.84 15.72 4.18 100


Note: * Dry Rubber Content

Unit: '000 tons

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Table 5. Exports of RSS of Thailand by Grades, Table 5. Exports of RSS of Thailand by Grades, 1996 - 20061996 - 2006

YearRSS's Grades

Total1X 1 2 3 4 5

1996 - 14 4 973 172 17 1,180

1997 - 12 2 907 158 16 1,095

1998 - 15 9 833 180 11 1,047

1999 - 27 4 831 182 28 1,071

2000 - 19 2 805 165 15 1,006

2001 - 19 1 723 118 10 870

2002 - 16 0 855 169 10 1,050

2003 - 29 4 939 171 7 1,150

2004 1 29 2 796 173 3 1,003

2005 1 23 2 726 165 5 921

2006 1 14 2 769 150 3 939

Proportion (%) 0.03 1.91 0.28 80.78 15.90 1.10 100

Unit: '000 tons


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Table 6. Exports of TSR of Thailand by Grades, Table 6. Exports of TSR of Thailand by Grades, 1996 - 20061996 - 2006

Year

STRUn-specified

BlockTotal

XL 5L 5 10 20 CV

1996 - 4 1 8 246 - 65 324

1997 - 9 0 12 334 - 10 456

1998 - 7 0 16 309 1 148 480

1999 1 5 0 29 415 1 89 541

2000 2 7 0 86 559 5 149 808

2001 1 4 0 86 536 7 130 763

2002 1 3 1 86 595 11 131 829

2003 1 4 0 79 637 13 178 913

2004 1 4 0 74 703 14 202 998

2005 1 6 0 60 774 19 249 1,109

2006 1 6 8 70 719 14 252 1,069

Proportion (%) 0.08 0.73 0.14 7.32 70.29 1.02 20.40 100

Unit: '000 tons


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Table 7. Exports of Other Types of Natural Rubber Table 7. Exports of Other Types of Natural Rubber of Thailand, 1996 - 2006of Thailand, 1996 - 2006

YearAir Dried

SheetCrepe Skim USS Others Total

1996 18 1 20 6 11 56

1997 14 1 24 9 15 60

1998 11 1 27 10 17 66

1999 10 1 32 2 13 57

2000 10 2 40 1 14 67

2001 7 4 33 2 14 61

2002 9 6 41 1 36 93

2003 11 5 38 1 47 102

2004 11 4 44 0 84 143

2005 11 4 57 0 41 113

2006 13 3 50 0 140 207

Proportion (%)

12.14 3.17 39.70 3.24 42.04 100

Unit: '000 tons


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Table 8. Imports of Thai Natural Rubber by Countries, Table 8. Imports of Thai Natural Rubber by Countries, 1996 - 20061996 - 2006

Year China Japan U.S. MalaysiaS.Kore

aEU Others Total

1996 530 383 174 111 102 212 251 1,763

1997 563 300 240 132 122 210 270 1,837

1998 500 238 280 179 123 226 294 1,839

1999 410 243 236 155 157 241 344 1,886

2000 505 418 330 244 136 231 303 2,166

2001 435 368 302 297 139 233 267 2,042

2002 499 437 382 364 139 266 322 2,354

2003 543 651 279 365 166 294 275 2,573

2004 526 620 249 384 172 292 395 2,637

2005 540 573 238 404 185 281 411 2,632

2006 493 747 211 443 173 262 443 2,772

Proportion(%)

23.03 20.31 11.92 12.56 6.59 11.22 14.59 100

Unit: '000 tons


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Table 9. Exports of Thai Natural Rubber Table 9. Exports of Thai Natural Rubber by Ports/Customs Houses, 1996 - 2006by Ports/Customs Houses, 1996 - 2006

Year

Ports Customs Houses

Others TotalBKK Songkhla

Laem-chabang

PhuketChiang

SaenPadang Besar

Sadao Betong

1996 540 472 18 96 0 473 78 31 55 1,763

1997 519 370 28 139 0 572 93 39 77 1,837

1998 509 367 41 116 0 538 152 34 83 1,839

1999 484 326 60 102 0 684 133 27 69 1,886

2000 273 446 142 247 0 740 203 32 82 2,166

2001 166 429 64 222 0 710 252 28 171 2,042

2002 430 408 60 199 0 771 303 35 148 2,354

2003 454 509 69 158 3 852 338 38 152 2,573

2004 340 387 145 114 26 946 359 41 278 2,637

2005 321 317 138 98 39 935 475 35 274 2,632

2006 335 307 164 90 24 1,027 450 39 337 2,772

Proportion (%)

18 18 4 6 0 34 12 2 7 100

Unit: '000 tons


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Table 10. Value of Natural Rubber Exports of Thailand Table 10. Value of Natural Rubber Exports of Thailand by Types, 1996 - 2006by Types, 1996 - 2006

Year RSS STRConc.Latex

Others Total

1996 41,658 11,639 7,875 129 61,301

1997 32,993 14,615 7,742 201 55,551

1998 30,931 15,096 8,775 214 55,015

1999 24,760 12,507 6,299 525 44,092

2000 25,130 20,885 7,067 123 53,205

2001 23,585 22,276 12,658 182 58,700

2002 29,818 26,824 17,433 531 74,606

2003 43,265 45,264 26,857 441 115,827

2004 49,050 53,403 34,652 500 137,604

2005 47,902 63,937 36,536 494 148,868

2006 68,620 83,870 52,358 513 205,361

Proportion (%) 41.35 36.66 21.61 0.38 100

Unit: Million Baht


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Table 11. Natural Rubber Consumption of Thailand Table 11. Natural Rubber Consumption of Thailand by Types, 1996 - 2006by Types, 1996 - 2006

Unit: '000 tons


Year STRConc. Latex

RSS ADS Others Crepe Total

1996 63 39 49 7 7 9 174

1997 66 41 50 7 10 9 182

1998 67 52 43 7 11 7 186

1999 78 71 61 11 4 2 227

2000 88 81 55 7 10 1 243

2001 96 75 61 11 7 3 253

2002 107 78 69 11 10 3 278

2003 115 83 74 12 11 4 299

2004 123 88 79 13 13 3 319

2005 129 93 82 14 13 3 335

2006 104 132 70 8 5 1 321

Proportion (%)

36.78 29.59 24.56 3.85 3.58 1.63 100

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Table 12. Natural Rubber Consumption of Thailand Table 12. Natural Rubber Consumption of Thailand by Types of Products, 2003 - 2006by Types of Products, 2003 - 2006

Types of Products 2003 2004 2005 20061. Tires 124 130 140 137

2. Elastic 27 40 44 68

3. Glove 55 57 58 52

4. Tire and Tube for motorcycles 22 20 25 22

5. Rubber band 26 27 25 16

6. Canvas shoes & Foam Candle 11 11 11 5

7. Others 12 12 10 4

8. Shoe Layer 3 3 3 4

9. Glue 1 1 2 2

10. Belt 2 2 3 1

11. Accessories part for motor vehicle 5 6 4 1

12. Hose 1 1 1 1

13. Scientific instruments 2 1 1 1

14. Foam Products 0 1 0 0

15. Retreading 6 7 8 6

16. Ballon 0 0 1 0

Total 298 319 335 321

Unit: '000 tons


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Table 13. Export Value of Natural Rubber Products Table 13. Export Value of Natural Rubber Products of Thailand, 2004 - 2006of Thailand, 2004 - 2006

Types of Products 2004 2005 2006Tire & Tube for Motorcars 25,722 34,575 43,583

Glove 23,916 26,078 27,288

Others 7,324 10,474 11,293

Compound Rubber 4,473 4,203 12,927

Elastic 4,096 4,630 6,866

Gasket / Seal 2,113 2,324 2,743

Hose 3,385 3,496 4,060

Rubber Band 1,841 1,912 2,468

Piping and Tubing Tires 1,542 1,661 1,901

Condom 1,493 1,844 1,796

Belts 1,000 1,256 1,057

Floor Tiles 967 457 484

Apparel Clothing 381 563 573

Nipple 217 211 184

Vulcanised Rubber 112 611 293

Rubber Eraser 33 32 28

Total 78,628 94,351 117,577

Unit: Million Baht


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Natural Rubber Prices in Thailand, 1996 – 2007Natural Rubber Prices in Thailand, 1996 – 2007

The Fall: 1996 – 2001

The global economic slowdown

Less bargaining power of NR producing countries despite firm global economy in some years

Low prices of synthetic rubber

Asian economic crisis in mid-1997 The overhang of Thai government stockpile

The demise of INRO in 1999

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The Rise: 2002 – 2007

The global economy has rebounded steadily to the present

Higher demand for rubber from China, India, and the emerging economies

Higher prices of synthetic rubber due to rising oil prices

Erratic weather and more natural disasters due to the global climate change

Establishment of Tripartite rubber cooperation among Thailand, Indonesia and Malaysia (ITRC and IRCo)

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Table 13. Natural Rubber Prices of Thailand, 1997 - 2007*Table 13. Natural Rubber Prices of Thailand, 1997 - 2007*

YearConc. Latex USS3 STR20 RSS3

Baht US Cents % (+/-) Baht US Cents % (+/-) Baht US Cents % (+/-) Baht US Cents % (+/-)

1997 24.23 77.23 - 27.25 86.86 - 29.87 95.21 - 30.18 96.20 -

1998 25.30 61.15 -0.21 25.68 62.07 -0.29 27.86 67.34 -0.21 29.44 71.16 -0.26

1999 19.88 52.54 -0.14 19.85 52.46 -0.15 22.65 59.86 -0.14 23.51 62.13 -0.13

2000 22.98 57.22 0.09 23.43 58.34 0.11 25.70 63.99 0.09 26.84 66.83 0.08

2001 20.84 46.90 -0.18 22.55 50.75 -0.13 23.94 53.88 -0.18 25.34 57.03 -0.15

2002 25.73 59.89 0.28 29.15 67.85 0.34 32.39 75.40 0.28 32.69 76.09 0.33

2003 35.60 85.81 0.43 40.17 96.83 0.43 41.97 101.17 0.43 44.45 107.15 0.41

2004 39.96 99.35 0.16 46.66 116.00 0.20 49.26 122.47 0.16 51.72 128.58 0.20

2005 44.85 111.51 0.12 55.19 137.22 0.18 56.51 140.50 0.12 60.16 149.58 0.16

2006 57.12 150.78 0.35 72.12 190.38 0.39 75.63 199.65 0.35 79.79 210.63 0.41

2007* 52.91 152.10 0.01 70.85 203.64 0.07 73.46 211.19 0.04 77.20 221.88 0.05

% Change (1997-2006)

1.18 0.97 1.60 1.34 1.46 1.22 1.56 1.31


Note: * * Average of Jan - Sep 2007

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Figure 1. Natural Rubber Prices of Thailand, 1997 - 2007*Figure 1. Natural Rubber Prices of Thailand, 1997 - 2007*

0

30

60

90

120

150

180

210

240

97 98 99 00 01 02 03 04 05 06 07*

US Cents/kg

Conc. Latex USS3 STR20 RSS3

-11.01%

17.10%-11.46%

21.03%

Note: * Average of Jan - Sep 2007

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Table 14. Tokyo and Singapore Rubber Futures MarketsTable 14. Tokyo and Singapore Rubber Futures Markets

YearTokyo Singapore

Yen/kg % (+/-) US$/kg % (+/-)

1995 153.92 0.30 158.13 0.39

1996 147.59 -0.04 138.99 -0.12

1997 118.40 -0.20 99.80 -0.28

1998 92.82 -0.22 70.31 -0.30

1999 72.26 -0.22 61.38 -0.13

2000 74.95 0.04 66.03 0.08

2001 66.62 -0.11 56.95 -0.14

2002 99.12 0.49 75.87 0.33

2003 128.92 0.30 107.28 0.41

2004 140.53 0.09 127.94 0.19

2005 166.12 0.18 149.25 0.17

2006 244.16 0.47 208.07 0.39

2007* 263.76 0.08 220.68 0.06

% Change (1994-2006) 71.00 40.00


Note: * * Average of Jan - Sep 2007

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Figure 2. Tokyo and Singapore Rubber Futures MarketsFigure 2. Tokyo and Singapore Rubber Futures Markets

0

50

100

150

200

250

300

95 96 97 98 99 00 01 02 03 04 05 06 07*

Yen/kg

0

50

100

150

200

250US Cent/kg

Tokyo Singapore

-6.46%

21.42%-7.11%

20.32%

Note: * Average of Jan - Sep 2007

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The Future: ?????

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Conclusion

The balance of supply and demand for natural and synthetic rubber will lead to a sustainable development of the rubber industry, and the

physical rubber market should be strengthened in order to lower rubber prices’ volatility.

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Thank you for your attentionThank you for your attention

Yium Tavarolit Chief Secretary and Economist International Rubber Consortium Limited (IRCo)...

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