Rubber trees 101

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Originally Posted by thaimeme

ood to hear that things might be turning for the better, Jim.

I'm assuming that the price per kilo, for latex, fluctuates on the whims of the market and politics of the day?

Hope things continue in your [et al] best interests.

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As I posted way back. more to do with market manipulation by the big players.
Tire companies have had a bumper profit year, short term gain, which may turn into a long term loss.
In the end market forces, supply and demand win out, as said Indian rubber output lowest in 20 years, it's not like turning on a tap, unfertilized or maintained plantations will take time to get back up to speed.

Elnino and probably the reverse Lanino next year are an unknown factor, for many small plantations, it could be there end. same for larger company run plantations who employ waged workers.

For me, I can survive on 15 Baht a kilo and live on 20 Baht, after that it's money in the bank.

My bet is a shortage is coming, even a possible under-supply will drive up prices, make hay while the sunshine's.

33 baht per kg @ auction yesterday, cup, Udon province. We have'nt had a sale yet this season.

Driving rain here at the moment, hope it goes all night, cool the place down, all the plantations are up and running, just too hot to get much output.

No tapping tomorrow though, roads already flooding, hope the power stays on.

Hi,

I am not able to post links due to my post count.

globalrubbermarkets.com/43000/43000.html

Thailand: Rubber production halved by drought - Global Rubber Markets

Best wishes,

Dodyai

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Originally Posted by Dodyai

Hi,

I am not able to post links due to my post count.

globalrubbermarkets.com/43000/43000.html

Thailand: Rubber production halved by drought - Global Rubber Markets

Best wishes,

Dodyai

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Pretty well what I've been saying for over a year, there is no oversupply, think the 50 percent is over the top, but there has been a drop in production from low prices, Elnino has just added to it.

Just a bit of an experiment on my part, but a money saver now and perhaps a little money maker later.

Got a 100 liter/44 gallon metal drum and made it into a charcoal maker, we collect the fallen branches and convert them into charcoal, keep the fire danger down, the plantation cleaner.

So far, 10 bags out of a 15 rai plantation and still going, not going to make a million, but won't be buying charcoal ever again.

That's MIL's job. She gathers fallen branches into heaps every 2-3 months, BIL, turns up and loads the E10 truck up, delivering it to MIL's house. It's all hers for cooking/selling/giving it away. It does indeed burn well, and makes good charcoal.

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Originally Posted by thaiguzzi

That's MIL's job. She gathers fallen branches into heaps every 2-3 months, BIL, turns up and loads the E10 truck up, delivering it to MIL's house. It's all hers for cooking/selling/giving it away. It does indeed burn well, and makes good charcoal.

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People don't bother here, too lazy and plenty of wood around without the need to go collecting.

Question would be, is it economical to set up a central point to collect and convert to charcoal, as said have a factory laying idle.

Bag of charcoal, local price, 150 Baht, but 1,000s of tons just left to rot, or burn't off.

Would need a good number cruncher to figure out the break even point, cost of buying, transport and manufacture, plus tax, must pay as it's a legal company.

Will have a look at it, I know they have some rules that locals can make so much for personal use, but they are not allowed to go cutting trees down.

One for Fredd W on the other thread, says he very smart, looking for an income here.

First sale of the season yesterday, 31.10 baht per kg @ auction. Pitiful amount in weight, but we only sold as staff were swapped onto different plots.

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Originally Posted by thaiguzzi

First sale of the season yesterday, 31.10 baht per kg @ auction. Pitiful amount in weight, but we only sold as staff were swapped onto different plots.

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We are already into 4 lost tapping days in a row, due to rain, pissing down at the moment.

When it comes to rain, only two types, too much or too little.

Rubber prices dropping daily, AGAIN, lost about 5 Baht a kilo in under a week.

Nothing to do with supply, this time, out and out manipulation by China, who has stepped in to stop speculation on several commodities.

Got to love the free market, that farmers etc have to live under when the main buyer communist China, uses state controlled international capitalism to set prices.

^But surely they will be found out and sanctions will be imposed!! :rolleyes:

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Originally Posted by OhOh

^But surely they will be found out and sanctions will be imposed!! :rolleyes:

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Found out, they are not hiding the fact.

Exclusive: China securities regulator confirms order to curb futures speculation | Reuters

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Originally Posted by jamescollister

Found out, they are not hiding the fact.

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Unbridled gambling by the peasants to be curtailed in Chinese "markets", more likely. Which will reduce the speculated price
and hopefully bring the market to publish real prices, rather than algo driven prices or "external" agencies politically driven price, up or down, manipulation/pressure. IMHO.

Their, allegedly, is a miss pricing going on in the Chines pork "market" which has spooked the Chinese. One result was the release of frozen pork form it's in country storage. This caused a sharp reduction in prices and speculators, as well as Vietnamese farmers, were affected.

http://www.globaltimes.cn/content/983360.shtml

"So the recent falloff in buying by Chinese traders has had a big impact on Vietnamese pig farmers. The authorities have yet to offer any explanation for the buying halt, which came after China's Ministry of Commerce and 12 local governments recently increased the supply of frozen pork from reserves to replenish supplies, a measure that was seen as necessary to help stabilize the market, especially as soaring pork prices had triggered public discontent in China. Chinese traders appear to have reduced their imports to avoid possible losses after the authorities took this measure to stablize pork supplies, but it seems it caught Vietnamese farmers by surprise."

From your link:

"China's securities regulator on Friday urged commodity futures exchanges to curb excessive speculation following a surge in prices that has sparked fears markets were heading for a dangerous boom-and-bust cycle."

The China Securities Regulatory Commission (CSRC) said it would not allow the futures market to become a "hot-bed" for speculators.


The CSRC comments confirmed a Reuters story earlier on Friday that the regulator had asked commodity futures exchanges in Dalian, Shanghai and Zhengzhou to bring speculative trading activity under control.


Investors, including hedge funds and retail investors [Chinese peasants], have placed big bets on Chinese commodities futures this year, driving up contracts including in iron ore, rebar, cotton and even eggs. The rally has prompted many analysts to warn of similarities with a boom in the country's stock markets, which reversed into a sharp crash last summer."[Causing Chinese social unrest]

Jim you may well be correct re the Chinese and futures market affecting price of commodities…remember article re re- bar production decrease and increased price in Thailand?..Contradicts increased production for Chinese infra structure projects..???
We sold cup today at 27bt minus 6% for water content to major buyer.
Not sure if I understood correctly but wife tells me our cutters told her that the buyers have some guaranteed price contract with their buyers…all too hard for me.

Jim,
can you remember the background and the reasons to the two years of steady price increases leading to record highs of 190 baht per kg for smoked ribbed sheet and 105 baht per kg for cup? This would have been 6-7 years ago.
Thanx,
Mike.

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Originally Posted by thaiguzzi

Jim,
can you remember the background and the reasons to the two years of steady price increases leading to record highs of 190 baht per kg for smoked ribbed sheet and 105 baht per kg for cup? This would have been 6-7 years ago.
Thanx,
Mike.

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2008, remember it well, had just opened the factory, we hadn't started tapping yet, just buying latex off others.
First month went form zero to 225 kilos of sheet a day, I was going to be rich, shed full of RSS.

Everything was going up, no one could lose, but it was all smoke and mirrors, sub prime con came out, the boom was only on paper, billionaires were make, but people lost, homes, pensions and jobs and I was back to work.

The rubber prices went up, not on supply and demand, but a belief that the world economy was booming without an end.

Today it's the reverse, everything is doom and gloom, even when there is good numbers, the investors, traders disbelieve.

Just reading, Indian tire makers can't keep up with demand and are lobbing the government to open up the import rules for rubber.
China may well have killed off Indian rubber production and will now be able to set the price by constantly manipulating the market.

Not hard when you are that big, stop buying, dropping the price, stock pile at the lower price, then stop buying again, dropping the price for the next round.

Afraid we are just leaves in a stream, go where the water takes us.

At the moment I have bigger problems, which could mean bye bye Thailand and hello welfare in Australia.
Will see what happens and see is the word, losing my central vision, need monthly injections, not cheap and Khun Kaen, 8 hour drive away is the nearest hospital.

Thanx Jim,
all the best,
Mike.

First sale in a month, only the second of this season.
Before it was too hot and the land too dry affecting output, lately it's been too wet to tap regularly.
Sold cup @ auction yesterday, 27.05 baht per kg.
We got there about 2.30 pm, queue no. 122. Normally that time we'd get no. 250ish.
Complete lack of punters, very low amount of product.
Still seeing nearly daily timber trucks driving full with rubber lumber.

Go figure, price down again, yet Indian tire companies are here at the moment signing a deal with the Thai government for an extra 300,000 tons.

Lot of rain here too Mike, but rubbers flowing, more would be better, 2 new tires for the car and a new battery, always out going costs, but getting by, just less beer and weekends away.

Think this says what China's long term game is re rubber products, particularly tire production.

India is the number 2 tire producer, that's a lot of tires, put them out of business and China has total control of the market.

From and Indian rubber site.

[The association called for a conducive atmosphere which is win-win for all should be evolved through consensus among stakeholders for the better future of Indian rubber industry. If imports are made more liberal by change in the policy it will put an end to rubber cultivation in India, which was developed over a period of 60 years.]

If India has no or little home grown rubber production, it's tire manufacturing reliant of imports alone, imports that China can control the price of by using state controlled industry, it's goodbye to the Indian tire manufactures.

Question will be, how much world rubber production will go before it hits bottom, my way of thinking, if India can't keep it's plantations, which get 25 percent higher farm gate prices due to import taxes now.
Malaysia who's costs are higher will be next, followed by the next country on the production price ladder.

No India??

Rubber Tires Exports by Country

Below are the 15 countries that exported the highest dollar value worth of new rubber tires during 2015:

1. China: US$13.8 billion (19.3% of total rubber tires exports)
2. Germany: $5.4 billion (7.5%)
3. Japan: $5.4 billion (7.5%)
4. United States: $5.1 billion (7.1%)
5. Thailand: $3.4 billion (4.7%)
6. South Korea: $3.4 billion (4.7%)
7. France: $2.8 billion (4%)
8. Netherlands: $2.2 billion (3.1%)
9. Spain: $2.1 billion (3%)
10. Poland: $2 billion (2.8%)
11. Czech Republic: $2 billion (2.8%)
12. Slovakia: $1.8 billion (2.5%)
13. Canada: $1.8 billion (2.5%)
14. Indonesia: $1.6 billion (2.2%)
15. Hungary: $1.4 billion (2%)

Among the above countries, only two grew the value of their rubber tires exports since 2011: Slovakia (up 34.6%) and Hungary (up 2.9%).

Those countries that posted declines in their exported rubber tires sales were led by: Spain (down -43%), Japan (down -34.7%), France (down -31.8%) and Germany (down -21.8%).

The listed 15 countries shipped 75.6% of all rubber tires exports in 2015 (by value).

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Originally Posted by crepitas

No India??

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Think that's for exports, big population in India, large internal demand, as far as I've read India is the second largest consumer of natural rubber.

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Originally Posted by crepitas

Rubber Tires Exports by Country Below are the 15 countries that exported the highest dollar value worth of new rubber tires during 2015: China: US$13.8 billion (19.3% of total rubber tires exports) Germany: $5.4 billion (7.5%) Japan: $5.4 billion (7.5%) United States: $5.1 billion (7.1%) Thailand: $3.4 billion (4.7%) South Korea: $3.4 billion (4.7%) France: $2.8 billion (4%) Netherlands: $2.2 billion (3.1%) Spain: $2.1 billion (3%) Poland: $2 billion (2.8%) Czech Republic: $2 billion (2.8%) Slovakia: $1.8 billion (2.5%) Canada: $1.8 billion (2.5%) Indonesia: $1.6 billion (2.2%) Hungary: $1.4 billion (2%)

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When one invests in an industry, installs the newest equipment, has a very low wage and benefits structure and minimal taxes, profits are there to be harvested or prices reduced to gain market share. It appears the Chinese have chosen market share.

One wonders how the Ameristanis/Germans arrived at dominance in some markets, it wouldn't be from the pre/post WWII aid it received or the investment from western banks would it?

No of course not, all the hightech companies generating most of these countries profits are due to Vorsprung Durch Technik myth because nobody other than the whiteys can learn past 123.

As long as someone buys your product keep producing. When they stop do something else. Or you die.

I ran a commercial mowing business. Bought Chinese tires to replace the Chinese tires that came with the machines. Never again, they won't hold up. Only American tires for me.

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Originally Posted by sranchito

I ran a commercial mowing business. Bought Chinese tires to replace the Chinese tires that came with the machines. Never again, they won't hold up. Only American tires for me.

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You replaced original tyres with exactly the same or another brand/spec? Or did you buy a different suppliers tyres based on what, price, specification, testing, wear rate ........? One suspects due to your contentment with the original Chinese manufactured tyre, the Chinese tyre industry is quite capable of producing tyres that meet your expectations.

Let me guess - price. If so then a lesson is learnt, buy on a different criteria.

But I'm sure you grabbed at such a good deal. :rolleyes:

One wonders what the price of rubber would be if the Chinese buyers weren't buying. The market, last year, exported US$55+ billion last year, that's still a pretty large market to be in. 10 of the 15 are probably not rubber growing countries so they are importing from somewhere.

China has 19% of the global market, that's not a monopoly when considering other global products. Start complaining when they have 80% and there is only one other supplier.

One could always blame the Thai exporters of course. They are being forced at gun point, threatened with law suits, or being seduced to sell all the Thai rubber to China or does some go elsewhere? If elsewhere are the other buyers offering better prices?

My head hurts...

Sold @ auction yesterday, 25.71 baht per kg. This time last year was around 28ish.
Plenty of sellers this time, we got there around mid day, a couple of hours before we normally do and our queue no. was 197/198.

Had 9 days of almost constant rain, can't even get to some of the plantations without a boat.
Be days, if it stops raining for the water to run off and the plantations to dry out, hate this time of year, power on and off, net out or dead slow all the time.
Just to top it off, the well pump burned out, so no hot water to shower, bucket baths until I can get it fixed.

Would just keep drinking to kill the time, but don't know when the next pay day will be, better keep the cash for the next thing that breaks.
Joys of being a farmer and the rain has just started again.

When it rains, it pours...

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Originally Posted by jamescollister

Had 9 days of almost constant rain, can't even get to some of the plantations without a boat.
Be days, if it stops raining for the water to run off and the plantations to dry out, hate this time of year, power on and off, net out or dead slow all the time.
Just to top it off, the well pump burned out, so no hot water to shower, bucket baths until I can get it fixed.

Would just keep drinking to kill the time, but don't know when the next pay day will be, better keep the cash for the next thing that breaks.
Joys of being a farmer and the rain has just started again.

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Beat me to it Jim.....almost the same story down here...though I did manage to fix our well pump issue in a lull of the rain (have a tank and domestic pump so not too serious) ....just a rain soaked conduit box....sigh.
Oh well at least did not loose any trees in last night's rather scary wind storm.

Even with this Euro thing, rubber price has gone up over the last few day's, makes little difference, have no rubber, but hope springs eternal.

Now can give the bank, a bag of hope instead of the car payments, works for me. Jim

Sold cup at auction today, 25.01 baht per kg. Pitiful output, possibly the worst June production in many a year.

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Originally Posted by thaiguzzi

Sold cup at auction today, 25.01 baht per kg. Pitiful output, possibly the worst June production in many a year.

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Don't know about where you are, but weathers been strange this year, rain everyday, that's normal, but light wind as well.

We are back on tapping, day or night, when it's dry enough, so no routine, just tap what they can, when the opportunity arises, but this wind drys out the rubber fast and stops the flow.

Local buyers are complaining, not enough rubber about, so I'm guessing the big suppliers are having trouble meeting contracts.

Price is down at the national auctions, but local gate price 22 Bt, has stayed flat.

There was an item in the FT this week suggesting the rubber price rise, on the Japanese exchange, was caused by the rains in Thailand. Somebody is screwing the growers and making a profit.

Province of Udon. 80 kms from Udon city, and 85 kms from Nong Khai town.
Awoke this morning to clear blue skies. Forgot what a blue sky looked like.
June we tapped when we could, morning, afternoon, evening, middle of the night, still only 25% output from previous June's.
Problem also these days, the best plantation, with the biggest, tallest trees, takes forever to dry out, especially if there is never any daytime sunshine.

These people are unbelievable at times, 2 guys rock up about renting the sheds at the factory, to buy and store rice.
Bell has been talking with them for over an hour, I keep out of these things, does my head in with all the non questions and non answers.

Anyway I finally go out to see what the deal is, no deal of course, yet, so I ask 2 simple questions, how long do you want to rent the sheds for, rice harvest is only about 2 months and how much rent will you offer.
Blank look,. think I had asked a question on particle physics.

Another hour of talks and the guys head off to inspect the factory, but more of the story comes out, now it's not just rice, but timber and cassava and they will need to install a big drive on/off truck scale.
They had tried to rent a cassava place down the road, already, had the truck scale, sheds etc but turns out the place wasn't legal and the government closed it down.

Ergo why they came to see us, but they don't seem to have any idea as to what they want legally, said I'm happy to rent the place monthly, cash in hand, but if you are not legal and the government comes, you are out, minus all the money you spent for setting up.
If a legal lease, say 3 years, registered with the land office etc then I have to pay the taxes on that income, which means you have to pay the rent set by the land office for the tax department, which will not be cheap, plus you will be paying your own company taxes.

That's the third set of wannabe business men this year, all have big plans, but no money, must think farangs are stupid and don't understand anything.

But if they generally deal with Thais, they can find an easy stooge. A tale of good money can open the door and fear can stop them being moved on. Rules and regulations, what are they.

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Originally Posted by OhOh

But if they generally deal with Thais, they can find an easy stooge. A tale of good money can open the door and fear can stop them being moved on. rules and regulations, what are they.

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There is a problem out my way, rules, tax, permits never existed when it was all dirt and goat tracks..

Times have changed, just because you can still buy/sell pick up truck loads of rubber, cassava etc with out getting licenses, paying taxes, doesn't mean you can open a factory and no one will notice.
First people to take note are the legal dealers, it goes up the chain from there.

I have EPA, health and safety, factories certification and land zoned for industrial use, this all costs to set up.
Thais think I am stupid enough to rent them the place at the same cost as farmland, or they go and build on some farmland, thinking no one cares, but the tax collectors care.

Farangs get caught in this no one cares attitude, that's why many get burnt, big difference between using a pick up to transport goods and using a 20 ton truck.

Anyway the prospective renters have not returned, same as the sugar processing factory guy from 3 months ago.

What was in your business plan that covered this possibility of reduced demand/lower prices?