Thai govt to spend over $180m in rubber market to support prices

BANGKOK, Dec 12 (Reuters): The Thai government is buying rubber from the market through a 6 billion baht ($183 million) buffer fund to support prices, the deputy farm minister said on Friday, while another fund will support domestic rubber futures with help from private firms.
"The government is using 6 billion baht from a buffer fund to buy all types of rubber. We are now buying about 1,000 tonnes a day. Next week, we will start buying around 3,000 tonnes a day," Amnuay Patisse told Reuters.
A total of 20 billion baht is available to the Rubber Estate Organisation, Amnuay said earlier this week, and the 6 billion baht is part of that.
An additional 420 million baht fund has been set up by the government and seven private companies to shore up prices of rubber futures on the Agricultural Futures Exchange of Thailand, Amnuay said.
The government and private sector contributed 210 million baht each to the fund, Pongsak Kerdvongbundit, honorary president of the Thai Rubber Association, told Reuters.
The government has previously said it would only intervene in the market if it had agreed sales for the rubber it bought, to avoid building up stockpiles similar to those accumulated under the subsidy schemes of the previous government.
Amnuay told Reuters on Monday that Thailand had sold 200,000 tonnes of rubber to China's Hainan Rubber Industry Group , taking sales to the Chinese firm to over 400,000 tonnes in two months.
However, Chinese sources with knowledge of the matter said the second deal had not yet been finalised.
An oversupply of rubber has pushed global prices to five-year lows.
"I'm confident that our measures can push rubber prices up to 60 baht per kg. We will buy internally and export. We already have contracts from buyers," Amnuay said on Friday.
Rubber farmers have threatened protests to get the government to support USS3 rubber, which farmers sell to factories, at a price of 80 baht per kg. It was quoted at 42 baht per kg on Friday.