Thread: Rubber trees 101

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!!

Originally Posted by OhOh

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

Found out, they are not hiding the fact.

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

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.

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.

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).

Originally Posted by crepitas

No India??

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.

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%)

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.

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...

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.

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.

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.

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.