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27 Mar 2015


Rubber Crisis, 2015: Options amid Falling Rubber Prices(Current Issue No. 2609 Full Ed.)

Amid concern towards a slump in rubber prices, one solution may be to encourage rubber growers to switch to other crops that offer better yields, e.g., oil palm, cassava and sugarcane.
However, rubber growers considering the switch to those crops are advised to consider other factors than profit thoroughly, e.g., location, soil conditions, water supply, weather conditions, traditional ways of life/local agricultural expertise, market conditions (prices and buyers), cultivation costs (fixed costs, e.g., land and agricultural equipment expenses, plus variable costs, e.g., labor, fertilizer, pesticides and maintenance expenses), as well as the payback period and price outlook for such crops.

Plummeting rubber prices caused by a global supply glut represent an important lesson for the Thai agricultural sector. Promoting rubber growers to switch to other crops is one of the solutions that could help growers, but the effectiveness of such ideas, in practice, will hinge upon many factors, particularly restrictions that farmers face in differing regions. Therefore, relevant agencies must place importance on agricultural supply management to maintain price stability in order to ensure that Thai farmers can be self-reliant when facing risks ahead.

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