The Battle for Rubber
27 april 2012
As is well known, Thailand is the largest supplier of natural rubber, which is a component of most automobile tires. In order to raise market prices within the country, local authorities have decided to raise prices to 120 baht (3.87 dollars) per kilogram, while buying up raw materials. As a result, automobile tire manufacturers will have no choice but to literally fight each other for raw materials.
At the same time, in the future, the Thai authorities plan to increase the price of rubber by fifty percent. Deputy Minister of Agriculture of the country Nattawut Saikuar stated that the price of 120 baht will be increased to 150, and then to 180 baht. He also stated that the main "plus" is to increase the profit from exports from the predicted 680 billion this year to 1 trillion baht in 2013. The Ministry will also discuss with Indonesia and Malaysia, the other two largest rubber suppliers, possible ways to stabilize prices.
Undoubtedly, the rise in prices for natural rubber from Thailand (the country's share in the supply of rubber to the global market is one-third of the total supply volume) will significantly affect the increase in expenses of tire companies - in particular, Michelin, Goodyear and Bridgestone.
At the same time, in the future, the Thai authorities plan to increase the price of rubber by fifty percent. Deputy Minister of Agriculture of the country Nattawut Saikuar stated that the price of 120 baht will be increased to 150, and then to 180 baht. He also stated that the main "plus" is to increase the profit from exports from the predicted 680 billion this year to 1 trillion baht in 2013. The Ministry will also discuss with Indonesia and Malaysia, the other two largest rubber suppliers, possible ways to stabilize prices.
Undoubtedly, the rise in prices for natural rubber from Thailand (the country's share in the supply of rubber to the global market is one-third of the total supply volume) will significantly affect the increase in expenses of tire companies - in particular, Michelin, Goodyear and Bridgestone.