Hi all you struggling rubber planters out there, a friend of mine e mailed me that there is a lot of doom and gloom in the rubber section, on that other forum, that I no longer visit. So thought I would post a bit here on my thoughts on the subject.

If you do a search for rubber forecasts, commodities buyers, rubber market analysts etc things do look bad. Forecasts of massive oversupply, new countries becoming rubber suppliers, large scale planting in Thailand, 2005 to 2008 coming on line, less demand, shrinking markets. The day of rubber has passed, no future in it, time to get out. These same grey man with crystal balls failed to see 2008/9.

Question is do you think it's over, time to sell up before the market collapses all together, plough down your trees and plant palm oil, which has been happening in places. Start looking for a teaching job, head back to the west, take up drinking Lao Kow.

So here's my take on it and I'd like to know what others think.
2008/9 prices fell through the floor, people were saying rubber was finished, there was no future in it anymore, Thai's left their plantations for jobs in the city and supply dropped, world wide. Prices gained on under supply, remember posting some where, when asked, is it the end. Replied, when the roads and highways are empty of cars, that's the end.

What's happened this time, last time was the collapse of the west, this time it's a slow down in China. The west is still bumping along the bottom and can't take up the slack, from a slow down in China, commodity prices fall. Demand drops and we have an oversupply of rubber.
Predictions for 2013 are 2.5 percent oversupply, that's a lot of rubber, but if you look at the long term history, rubber demand rises between 2 and 3 percent a year. If the world wasn't in stagnation, that oversupply would not exist.

When will the next boom in the world economy begin, no one knows, will things get worse, possibly, so what will happen to rubber prices.
Places like Malaysia, one of the big 3 rubber produces will cut supply because the wages and cost are just too high. They as a nation will move away from rubber to other less labor intense crops. Supply will decrease. hopefully prices will rise.

Over 1/2 the world rubber is synthetic, made from oil and our prices go hand in hand with oil prices, after all if you can make cheaper rubber from oil why buy rubber.
The markets work on sentiment more than facts, look at the Japanese stock market for rubber futures. Good employment numbers for the US and rubber gains 1 or 2 %, bad industrial numbers from China and rubber falls the next day.
When all the numbers start to be good the speculators will start up again and rubber prices will rise. So in short when the world gets better we will be back in the money, when will it happen, who knows.

I've done my numbers and can live with low prices as long as my tappers stay, if they leave I may have to learn to tap myself, but I'm not going anywhere or selling anything. If I had the money I would be buying plantations now, because they are as cheap as they are ever likely to be. Jim