Palm Or Rubber

[Boeing757]

Jim.

My Chinese abacus tells me that your $15,000 USD for 25 rai seems to equate to 360kg / Rai / year.

That is a very respectable return for your first year.

Am I about right, or have I screwed up (again)?

Clive

[jamescollister]

Jim.

My Chinese abacus tells me that your $15,000 USD for 25 rai seems to equate to 360kg / Rai / year.

That is a very respectable return for your first year.

Am I about right, or have I screwed up (again)?

Clive

Yes sounds about right, but I did say my better trees. We are not tapping all the trees yet so the average is a bit down on that figure. Guess I will have a better overall output number after this season and to be honest I have never really gone out and counted how many trees we are tapping, but some of the trees are producing far more than I had hoped for. Also when I said first year of tapping not quit the truth, we opened some the year before midway through the season on a one on two off just to se how they went. All in all I am very happy with the result. Jim

[David006]

Yes sounds about right, but I did say my better trees. We are not tapping all the trees yet so the average is a bit down on that figure. Guess I will have a better overall output number after this season and to be honest I have never really gone out and counted how many trees we are tapping, but some of the trees are producing far more than I had hoped for. Also when I said first year of tapping not quit the truth, we opened some the year before midway through the season on a one on two off just to se how they went. All in all I am very happy with the result. Jim

Whatever the numbers really equate to ..if you can get over 10% ROI ....life has got to be good..

Buy a a 25 rai bit of rubber plantation for a million or so( 30 -40 k AUS/US)....get US10- 15k a year income therefrom...looks good to me ...lot of rice, eggs, pork and diesel there hugh ( maybe a few cases of Archer and some "blended spirit" ..too)??

Won't get that from the NAB...

[jamescollister]

David sounds fine in theory, but I am not seeing the deals round here any more. 25 rai of 8 year old trees went for 3 mil last year and 5 rai of 7 year old went up for sale for 750,000 Baht, sold the next day for 900,000 Baht. Just too much money coming up from the South. Jim

[yotspeed]

David sounds fine in theory, but I am not seeing the deals round here any more. 25 rai of 8 year old trees went for 3 mil last year and 5 rai of 7 year old went up for sale for 750,000 Baht, sold the next day for 900,000 Baht. Just too much money coming up from the South. Jim

Rubber Land prices around this area (N.E. of Surat Thani) hitting new highs. Asking 18 rai at 300k+ per rai planted with very young trees - but soil not so good. Another plot at 330k per rai (7yr trees) they would not budge on the price. Family closed a deal on 18 rai for 5 mill. 4yr+ trees, good soil, just next door in Amphur Khanom. Various branches (no pun intended) of the family have lots of rubber spread around the area and still keen on buying, even at these prices!! If you look at the history of rubber prices over the last 5 yrs+ apart from the post crash downward spike at end of 2008 the trend is pretty steady upward. We have just gone through an exaggerated peak, probably due to the flood damages here in the south late last year (driving supply side down) but if you look at the trend line a drop to price levels around mid 2010 seems fair. Of course, it all depends on the demand from China and they are now starting to forecast (and see) a drop in car sales.

Still a lot of people cutting down trees (mainly flood damaged) around this area and although some are planting palm the majority looks to be re-planting rubber.

BTW; locally the price of PO is now back down to 6.00 per kg from the peaks of 9.00 a month or so ago.

[tothemark]

David sounds fine in theory, but I am not seeing the deals round here any more. 25 rai of 8 year old trees went for 3 mil last year and 5 rai of 7 year old went up for sale for 750,000 Baht, sold the next day for 900,000 Baht. Just too much money coming up from the South. Jim

Rubber Land prices around this area (N.E. of Surat Thani) hitting new highs. Asking 18 rai at 300k+ per rai planted with very young trees - but soil not so good. Another plot at 330k per rai (7yr trees) they would not budge on the price. Family closed a deal on 18 rai for 5 mill. 4yr+ trees, good soil, just next door in Amphur Khanom. Various branches (no pun intended) of the family have lots of rubber spread around the area and still keen on buying, even at these prices!! If you look at the history of rubber prices over the last 5 yrs+ apart from the post crash downward spike at end of 2008 the trend is pretty steady upward. We have just gone through an exaggerated peak, probably due to the flood damages here in the south late last year (driving supply side down) but if you look at the trend line a drop to price levels around mid 2010 seems fair. Of course, it all depends on the demand from China and they are now starting to forecast (and see) a drop in car sales.

Still a lot of people cutting down trees (mainly flood damaged) around this area and although some are planting palm the majority looks to be re-planting rubber.

BTW; locally the price of PO is now back down to 6.00 per kg from the peaks of 9.00 a month or so ago.

300,000+ per rai!! ! Rubber would have to double in price to even get a reasonable return at that price, unless of course its within the city limits which i very much doubt.

If your looking to buy rubber, Its not the Rai that counts its the number of trees (productive ones at that) Most Thais think im crazy when they see me counting trees. The man that counts trees -pmsl

I was offered sites in the area Nong Khai (within 50km) NE in Feb 11 and these were the results :

60 rai but only 3700 trees, 1500 15 year +, and 2200 at 8 year plus - Price originally asked 6.9m and then rose to 7.2m - Older trees were badly cut and yield down due to poor feeding. Had power,water and adjacent to main road. Yield was averaging about 1 kilo PTM (per tree a month).

40 rai but only 2200 trees 15 year + again bady cut, yield was about 1.1 kg PTM, Price 5.5m

36 rai but only 1800 trees, 600 10 year, 1200 6 year, 3.5m

11 rai young rubber didnt bother to count, 1.2m

18 rai, close to town with a hut that reputedly cost 1m to build, albeit it had some ornate woodwork, about 1100 trees, very very nice trees, never been cut and were 10 years old ! 4m

60 rai close to Laos border, trees 6 years never cut, ground stony, didnt count this one. 6.5m

40 rai close to town, 6 year old trees which had been cut ! poor quality trees, theres a suprise, 100,000 per rai

18 rai with 12 down to rubber circa 8 years 1.5m

50 rai about 3000 trees, very old rubber 25+ years and badly cut 5.5m

From this you can determine that you should pay around 100 k per rai, rough figures per tree would be around 2000 bht per tree.

Rubbers falling at the moment - and Thailand have put their interest rates up again - sit it out for a few months - keep an eye on rubberthai.com and buy when its low as there is a propensity in Thailand to offload during a fall, its called panic in the west !

But whatever you do dont just buy rubber because its rubber ! Thats like buying a Ford from an auction - just because its a Ford doesnt mean to say you wont have bought a pup (goofed up).

[SGD]

Yes Dave you need to be there, it's not only theft, but laziness. tapper has a pocket load of baht and goes on the piss for a week. Excuse too wet, can't be bothered to keep the grass down [ fire hazard] your not there how would you know. The work just will not get done and in the end you will be out of pocket. We run the place as business, keep on top of it, One tappers wife had a baby a few months ago, can't just say goodbye to 2 weeks of rubber. So we have a few casual tappers on call. They make 50% of the tap without the need to cut grass etc . Good for them and no loss for me. It is all a learning curve, but if you want to make a living you have to take charge. Jim

I've seen this 50% figure posted about quite a lot (and higher as well) but can you please explain what it is 50% of ? My mind boggles at he thought of you owning millions of baht of land and paying all the bills when some guy walks off with 50% of your crop !

[jamescollister]

Yes Dave you need to be there, it's not only theft, but laziness. tapper has a pocket load of baht and goes on the piss for a week. Excuse too wet, can't be bothered to keep the grass down [ fire hazard] your not there how would you know. The work just will not get done and in the end you will be out of pocket. We run the place as business, keep on top of it, One tappers wife had a baby a few months ago, can't just say goodbye to 2 weeks of rubber. So we have a few casual tappers on call. They make 50% of the tap without the need to cut grass etc . Good for them and no loss for me. It is all a learning curve, but if you want to make a living you have to take charge. Jim

I've seen this 50% figure posted about quite a lot (and higher as well) but can you please explain what it is 50% of ? My mind boggles at he thought of you owning millions of baht of land and paying all the bills when some guy walks off with 50% of your crop !

For a start good tappers are hard to find and when you have one you want to keep him, so you have to pay. People may do things differently, but I have 4 plantations each has a lead tapper or foreman, he gets 50% of the money that his plantation makes at the end of the month. We split all costs ie fertiliser,, fuel grass cutters [weedwackers scrub cutters ] Now each plantation is too big for one tapper, so he hires fires or splits the work with others, What type of deal he makes with his workers is up to him. I leave the running of the plantation entirely in his hands. One guy uses his brother in-law as a partner, another guy only taps

, but hires a man on day bases to collect the latex transport it to the factory and process the latex into sheet. Still another on my biggest plot hires tappers on a 40% cut, Up to them as I don't care as long as all is in order and the trees are taken care of. Plus it takes me out of the loop as far as making enemys by having to fire or hire locals. Once a week I inspect each plantation with the foreman and tell him what if anything needs done. My lead tappers can make 25,000 plus a month, good money for a Thai so there is an insentive to to a good job. Jim

[SGD]

For a start good tappers are hard to find and when you have one you want to keep him, so you have to pay. People may do things differently, but I have 4 plantations each has a lead tapper or foreman, he gets 50% of the money that his plantation makes at the end of the month. We split all costs ie fertiliser,, fuel grass cutters [weedwackers scrub cutters ] Now each plantation is too big for one tapper, so he hires fires or splits the work with others, What type of deal he makes with his workers is up to him. I leave the running of the plantation entirely in his hands. One guy uses his brother in-law as a partner, another guy only taps

, but hires a man on day bases to collect the latex transport it to the factory and process the latex into sheet. Still another on my biggest plot hires tappers on a 40% cut, Up to them as I don't care as long as all is in order and the trees are taken care of. Plus it takes me out of the loop as far as making enemys by having to fire or hire locals. Once a week I inspect each plantation with the foreman and tell him what if anything needs done. My lead tappers can make 25,000 plus a month, good money for a Thai so there is an insentive to to a good job. Jim

Thanks for that explanation.

What still confuses me is the reverse mathematics where, using your 25k figure, you end up with a profit of 50k before divisions and you getting 25k as well. I thought there was a lot more profit involved or I thought you were dealing with much bigger land sizes. Am I missing / misinterpreting something ?

Then where do you stand with theft ? What percentage of your yield do you think you actually see ? Not much good to get 50% when 50% of the original has "walked".

Very interested as rubber is up there on my list, though I know land prices can make it less viable.

[jamescollister]

For a start good tappers are hard to find and when you have one you want to keep him, so you have to pay. People may do things differently, but I have 4 plantations each has a lead tapper or foreman, he gets 50% of the money that his plantation makes at the end of the month. We split all costs ie fertiliser,, fuel grass cutters [weedwackers scrub cutters ] Now each plantation is too big for one tapper, so he hires fires or splits the work with others, What type of deal he makes with his workers is up to him. I leave the running of the plantation entirely in his hands. One guy uses his brother in-law as a partner, another guy only taps

, but hires a man on day bases to collect the latex transport it to the factory and process the latex into sheet. Still another on my biggest plot hires tappers on a 40% cut, Up to them as I don't care as long as all is in order and the trees are taken care of. Plus it takes me out of the loop as far as making enemys by having to fire or hire locals. Once a week I inspect each plantation with the foreman and tell him what if anything needs done. My lead tappers can make 25,000 plus a month, good money for a Thai so there is an insentive to to a good job. Jim

Thanks for that explanation.

What still confuses me is the reverse mathematics where, using your 25k figure, you end up with a profit of 50k before divisions and you getting 25k as well. I thought there was a lot more profit involved or I thought you were dealing with much bigger land sizes. Am I missing / misinterpreting something ?

Then where do you stand with theft ? What percentage of your yield do you think you actually see ? Not much good to get 50% when 50% of the original has "walked".

Very interested as rubber is up there on my list, though I know land prices can make it less viable.

Ok try it this way it's a matter of scale, though I have 4 head tappers to run the show, they have workers tapping for them. Last year there were 8 tappers a tapping, this year it will be 10. So if each tapper produces 40,000 Baht of rubber a month. I get 20,000 baht x 10. Don't go by that number as some months are good and some are bad you have to take it over the year.

As for theft not a problem as we do latex, so the workers tap, sleep at the plantation until the morning and collect the latex and bring it to the factory. That's why you have to be living in the area so you can keep track of how much rubber you get and if production falls off you will know something is not right. We did have a problem with theft from the factory and I installed CCV. After we caught one and he went to live in the monkey house, the rest of thieves thought better and stayed away. [-so far ] Plus we upped the fire power just encase. Some of our bad boys come over from Lao and carry AK 47s. It's not all peaches and cream in the badlands. Jim

[strabel23]

Well we got a 20 rai palm plantation and yield about 3.5 to 4 tonnes every 20 days. My father in law takes care of it and we hadn't had a kilo/baht missing, himself he has Palm too.

So I am happy with it.

Good to hear you are doing ok, so can you anwser my question. 25 rai more or less than $15,000 US per year clear profit. Jim

Will depend on the price per kilo, but 25 rai of well taken care plantation should yield around 5 tonnes per 20 days.

We fertilize the trees 3 times per year.

Are you providing irrigation and is fertilizing only 3 times a year sufficent?

Edited April 5, 2011 by steven roberts