The market has been volatile in the past couple of years, with benchmark rubber surging to a record high of $6.40 per kg in February 2011 before falling by more than half recently to $2.75 as global economic problems fuelled doubts about demand.
Here are details of recent intervention schemes:
* The latest plan involves total export curbs of 300,000 tons. Thailand will cut 150,000 tons, Indonesia around 100,000 and Malaysia up to 50,000. The mechanics of the scheme have not been announced.
* The three nations will also cut down rubber trees on a total 16,000 hectares (39,520 acres) to take supply off the market. The area will be replanted but rubber trees take around seven years to mature and produce latex. The scheme is expected to take around 450,000 tons of rubber out of the export market.
* Farmers in Thailand who agree to cut down their trees will get a one-off compensation payment of 16,000 baht ($510) per rai. One hectare is equal to 6.25 rai.
* Earlier this year, Thailand launched a domestic price support plan. The government approved a 15 billion baht budget to buy rubber from farmers and hold it in stockpiles. However, so far it is believed to have bought only around 50,000 tons and that has done nothing to support raw rubber prices.
* In May, the Thai government waived a tariff on re-exported rubber to allow Thai exporters to take delivery on Tokyo Commodity Exchange (TOCOM) contracts to meet orders.
At that point, exporters were said to be struggling to collect rubber at home after rain disrupted supply.
The development helped support TOCOM prices, which had been pushed down by worries about the impact of Europe’s debt problems. In the end, however, the exporters only brought in 300 tons of rubber.
* In March 2011, when raw USS3 almost halved to 95 baht per kg from 180 baht following the earthquake and tsunami in Japan, which disrupted the supply chains of the car industry, Thailand promised measures to push the price back above 120 baht, which equates to around $5.0 per kg of export-grade smoked rubber sheet (RSS3). The market recovered and intervention was not needed. However, 120 baht remains a target for the Thai authorities.
* In late 2008, the top three producers agreed to cut combined exports by 915,000 tons in 2009 when RSS3 fell to $1.10 per kg because of the looming global recession.
Thailand, Indonesia and Malaysia urged exporters not to sell smoked rubber sheet (RSS3) below $1.35 per kg.
They cut 270,000 tons in the first quarter and prices jumped, although that was probably due in large part to the recovery in China’s demand for its car industry. The scheme was quietly shelved in the middle of the year.
* In the 1990s, the International Natural Rubber Organisation (INRO), which grouped rubber-producing and rubber-buying countries including Japan and some European states, pooled money to buy “buffer stocks”, held in warehouses to control rubber supply in the market and keep prices stable.
INRO collapsed in 1999 due to a conflict of interest between buying and selling countries and complaints about a lack of fairness and transparency in managing stocks. ($1=31.5250 Thai baht)