The rubber market in Thailand
Earlier this week we received a visit from five Thais from faraway Trang. Two couples and a daughter. One man is from my wife's village, if I understand it is the son of an aunt. He started looking for work years ago and found it as a rubber tapper in Trang. With 200 Baht a day (how so 300 Baht minimum wage?) It was not really well paid, but it was more than nothing, because in his native village there was absolutely nothing to earn.
He married a lady from Trang, they had a daughter and it went pretty well. Together with his wife's married brother, they rented a simple accommodation and all seemed to be going well. But alas, the rubber market has now collapsed and both men suddenly found themselves empty-handed, no work, no pay.
In desperation, the man asked my wife if there was work in Pattaya and she said, come over here and we'll find something. My question why do you do that was dismissed as typical farang, because it concerned family and you help them in an emergency. So the whole group is now at my house, plenty of room and a Thai doesn't need much as a place to sleep, just on the floor!
We will soon know whether work has been found for these people. Have faith in that yourself, because didn't my wife also provide work for her two brothers, a cousin and a few other people from her village? Well then!
Bangkok Post
As if questioning the motivations of these people, an extensive report appeared in the Bangkok Post this week on the rubber market, both on a global level and on the situation in Thailand. In short, there is a huge overproduction of rubber, the demand decreases and, accordingly, the price. The future doesn't look good either. I take a number of interesting points from that report, which you can read in its entirety at: www.bangkokpost.com/news/special-reports/
Global market
The demand for natural rubber, which is mainly used for the production of (car) tires, is declining due to a cooling economy in China. That country normally accounts for a decrease of more than 30% of world production, but the decrease is stagnating and this year is falling by more than 10%. In the good years, with the top being 2011, the largest producers of rubber, Thailand, Indonesia and Vietnam, planted more and more rubber trees, which now results in overproduction. Current world production provides sufficient supplies for the next two years and The Rubber Economist Ltd., a research firm for the rubber world, even expects the surplus to quadruple in 2016.
The trade of rubber in the important market in Tokyo is down 71% from the peak year of 2011. The price is the lowest in six years at 153 yen (45,8 baht) per kilo. The export price of Thailand, the largest rubber producer, has fallen by 22%.
Rubber in Thailand
The acreage of rubber plantations in Thailand has also increased enormously in recent years due to the success in sales, but now it seems that it is ending in a complete drama. The average yield this year was 37 Baht per kilo compared to 56 Baht last year and a top of 76 Baht in 2013. According to the Rubber Authority of Thailand, the average production price in Thailand is 65 Baht, which clearly indicates the extent of the loss for the rubber farmers. is.
Grants are provided by the government, but that is absolutely insufficient to cover the loss. It is necessary that sales in Thailand increase due to new rubber products and that plantations are switched en masse to other crops.
Future
An expert says at the end of the article: “For an improvement in the price, it is necessary that either the production drops drastically or the demand for rubber increases enormously. I don't see either happening for now.
And my guests from Trang? I hope they find work soon and can continue their family life in a normal way.
Happy New Year!
I can now tell you that the company has left Trang and now has its own accommodation, albeit still nearby.
The two men and the two women will go to work tomorrow, January 4, for 9000 Baht a month each!
Made a tour of Indonesia in November, where people have switched to palm oil on a large scale, huge fields that never end, in Thailand where we come every year you also see this development. Palm oil does create fewer jobs, but it is a good alternative.
Happy New Year and we will be back in Hua Hin in 14 days.
The price of palm oil has also collapsed and is the largest polluter in Indonesia not a good alternative?
Gringo : again clever of your wife that she got 4 people to wake up .
It's also neat that they already have their own accommodation, but I started to think a bit about that with your statement of:::albeit still nearby:: .
Sounds like you are less happy with that or am I tasting it wrong??
Know the problem of the rubber closely. In-laws have a small 8000 trees. Have already said felling and going into viticulture but yes that also takes time. Palm oil is NOT an option. Cows are also a difficult thing because of the heat you will have problems with the milk. Located in the south in Nakhon Si Thamarrat. Could pigs be a thing?
Who has a good idea?
Dear Gringo,
It's what you already know, when a new market comes along with money to be made
then everyone will. in this case the same with rubber.
People are now going to come up with something new and flatten the market again.
this is thailand.
I just wait for this new market to come along and they forget about the previous one.
black and white but true.
The rubber price has indeed gone down and now! 14 baht per kilo.
Sincerely,
Erwin
There must be a mistake somewhere in the article. Rubber trees, massively planted just before or after the record year 2011, do not affect the current market as a rubber tree takes about 8 years to become productive. So the major slump of the market is actually yet to come. Fortunately for the farmers, they can make up for part of the loss by selling the wood, as the wood from rubber trees can also be used for other purposes.
An alternative with palm oil is also not a good idea because this price is also very low. Currently, one kilogram of palm oil fruits yields a small 5THB, which is one fourth of the price of two years ago. Due to large imports of palm oil in Thailand, this price has also collapsed. Farmers, who have to rent the land for these plantations, do not even get out of the costs : fertilization, felling, transport ... because of the long drought last year, irrigate ... some just let the fruit rot because it produces less loss than harvesting the fruit.
The market for wood is also so low at the moment that it is almost impossible to recover the costs for kp. Not at all if the trees are in a rural area and then also have to be transported to a road where they can be transported further by truck.
We have land in rayong of about 11 rai.800 rubber trees yield about 17 baht per kilo.
But when I read the report here, the average yield is 37 baht per kilo.
Relatives of my wife run the plantation. Maybe it's time for me to drop by and check the prices of the rubber there.
Best regards and a happy new year.