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China and other countries are not importing as much rubber as they once did. This is one reason for the current crisis in Southeast Asia’s rubber industry. Prices are below the cost of rubber production. Farmers in Thailand, Malaysia and Indonesia control two-thirds of market. The three countries created the International Rubber Consortium. Yium Tavarolit is the chief executive officer of the group. He says traders have affected rubber prices. Mr. Yium says the low prices have caused some rubber farmers to begin growing other crops. Recently, Thailand’s government spent almost $2 billion to buy rubber directly from producers. It is part of the government’s plan to spend $11 billion to support the price of crops grown by the country’s farmers. But an industry expert in Tokyo says such moves by Thailand have, in his words, “always failed.” Experts predict that in 2014, farmers will have produced 300,000 tons more rubber than is needed. Mr. Yium says Thailand and other governments must support their rubber farmers. The Thai government’s support caused a brief rise in rubber prices, but they dropped again in December. However, the news is not all bad for rubber farmers. China recently announced it would import twice as many agricultural products from Thailand next year as in 2014, including rice and rubber. Some economic experts predict the demand for rubber will increase worldwide in 2015 although the surplus is likely to remain.
