Thai rubber output to rise by 2010

Thailand expects rubber production to rise 13 percent by 2010, as it widens north-eastern plantation areas in a drive to turn the region into an Indochina rubber trading hub, a government minister said on Thursday.
The world's largest rubber producer kicked off its campaign to develop the new plantations five years ago, spurred by rising prices of the commodity, as well as the soaring cost of crude oil, which makes synthetic rubber pricier.
"We will have an additional 340,000 tonnes of rubber production from newly planted rubber trees in the northeast in 2010," Deputy Agriculture Minister Theerachai Saenkaew told Reuters in an interview.
Planted five years ago, the mature rubber trees had begun producing 130,000 tonnes of rubber this year, Theerachai said. "According to the plan to expand rubber plantations by 480,000 hectares in 2010, we will have up to 3.4 million tonnes of production by then," he said, referring to an area equivalent to about 1.2 million acres.
The production figure of 3.4 million tonnes is an increase of about 13 percent from production of around 3 million now. Rubber prices have quadrupled over the last 6 years, propelled by rising demand driven mainly by China's tyre industry, as well as higher oil prices that drive up the cost of its synthetic cousin, which is derived from petroleum. Tokyo rubber futures, which set the global trend, rose to a fresh 28-year high last week above 345 yen, as supply concerns prompted active fund buying.
TRADERS SEE OUTPUT SHORT OF FORECAST Although the Thai government has forecast production of around 3.1 million tonnes of rubber in 2008, traders expect lower output of 2.9 million tonnes to 3.0 million tonnes after supply was affected by unseasonal wet weather.
Southern Thailand, which produces 90 percent of the country's annual rubber output, is likely to lose its decades-old crown of top rubber growing area as the government pushes to transform the northeast into the new rubber trading hub of Indochina. Around 850,000 hectares (2.1 million acres) of land in the northeast that is now devoted to growing eucalyptus, tapioca, and rice, will be turned into rubber growing areas by 2012, Theerachai said.