Date of Award:

1967

Document Type:

Thesis

Degree Name:

Master of Science (MS)

Department:

Economics and Finance

Advisor/Chair:

Leonard J. Arrington

Abstract

The relative share of natural rubber in the world's total rubber consumption had been decreasing from 75 percent in 1948- 1949 to 44.4 percent in 1965. Since the production of natural rubber has been rising over the same period , some predictions have been made indicating that there will be a surplus of production over consumption of natural rubber in the near future.

In the world output of natural rubber industry, Thailand ranks third, being surpassed only by Malaysia and Indonesia. Of all the exports of Thailand, rubber ranks second in value and is exceeded only by rice. Almost all of the rubber plantations are less than 8 acres in size and the prewar stock will give a low yield.

The purpose of this study is to evaluate such predictions. An attempt is also made to show that the rising relative share of synthetic rubber in the world's total rubber consumption has been primarily due to the inability of the producers of natural rubber to increase supply in pace with the increasing demand for rubber and with the technological advances in the synthetic rubber industry.

The study revealed that the United States and Western Europe can be expected to continue to exercise a great influence in the future rubber market as the industrial consumers absorb nearly 50 percent of the world's total rubber consumption. In addition, the United States is expected to play a vital role as the major producer of synthetic rubber, which appears to be a critically important fact or in determining the future prospects regarding the demand for natural rubber.

It is concluded that the techniques of replanting and new planting or both, using the best available high yielding clones would enable natural rubber producers to reduce the cost of production enough to meet the keen price competition from synthetic rubber. In the face of the threatening competition from synthetic rubber, the success of the natural rubber industry may be measured by the extent of realization of effective and unremitting efforts by the natural rubber industry.

The future of the natural rubber industry in Thailand, then, depends first on how fast production could be stepped up; secondly how fast the cost of production could be reduced by replanting with high yielding clone; and thirdly on the world price of natural rubber.

The projection of natural rubber production during the year 1970 indicates that all rubber produced will be sold. Synthetic rubber will be used to meet excess demand for new rubber during this period. But some surplus of the natural rubber will occur during the year 1975. The future of the natural rubber industry depends to a large degree on lowered costs of production with replanting and planting with high yielding trees, and improving the quality and marketing.

In conclusion, the planting scheme now being undertaken in the natural rubber producing countries, will be of advantage not only at the present but also in the future.

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Economics Commons

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