Thai rubber farmers threaten to intensify protest as government rejects demands

BANGKOK Tue Oct 29, 2013 4:19am EDT

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BANGKOK (Reuters) - Rubber farmers in Thailand on Tuesday threatened to intensify protests as the government rejected their calls for Bangkok to buy their produce at prices higher than the market.

A group of rubber farmers, fluctuating between 200 and 300, were continuing to block a main road with trees and trucks after gathering on Monday in the Bang-saphan district, around 300 km (190 miles) south of Bangkok, police said.

The move has not so far affected output or shipments from the world's biggest rubber producer and exporter, but there are fears deliveries to the port of Bangkok may be disrupted if protests escalate.

Angered by steep falls in prices, the farmers want the government to buy rubber sheet from them at 100 baht ($3.22) per kg, more than a third higher than the market price on Tuesday of 72 baht. They have snubbed a subsidy offered last month.

"If they don't buy rubber from us at 100 baht per kg, they will see much bigger protest tomorrow," Tossapol Kwanraud, one of the protest's leaders, told Reuters. But he declined to say how protests could be intensified.

The government earlier on Tuesday dismissed the protesters' demands.

"We have no plan to push up rubber prices by buying at high prices and keeping it in stocks as that would be a costly scheme that would not sustainably support farmers," Agriculture Minister Yukol Limlaemthong told Reuters.

A senior government official said about 1,500 police officers were on standby in case of violence.

Weera Sriwattanatrakul, governor of the region where the protest is taking place, told reporters the government had proposed forming a committee comprising farmers, exporters and officials to work on stabilizing prices.

Although some protesters said they were interested in the suggestion, others said they would be sticking with their demands.

The price of Thai unsmoked rubber sheet has changed little from the end of 2012, held down by weak demand from China and other big consumers. It is far below the 180 baht touched in February 2011, when benchmark smoked rubber sheet (RSS3) hit a record $6.40 per kg.

After the drop in prices last year, the government spent 22 billion Thai baht ($690 million) buying rubber from October 2012 to May 2013 and built up stocks of 210,000 metric tons of rubber sheet without making much impression on prices.

Thailand produces around 3.8 million metric tons of rubber sheet a year, around a third of the world's output, and exports 90 percent of it.

(Reporting by Apornrath Phoonphongphiphat; Editing by Joseph Radford)

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