Thai rubber farmers wheeze as prices slump

[retsdon]

Easy. Rubber is priced in dollars but the farmers get paid in baht. Devalue the baht and the farmers get paid more baht for their rubber. Problem solved.

[Eric Loh]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

It goes way back before PDRC, before Abhisit's administration in fact.

You misunderstand me. What I was referring was that the rubber farmers did the heavy lifting in the recent shutdown only to see their fortune have not improved while others got their intended results. No way the 7 months were the cause of poor rubber price.

Rubber super cycle comes and goes according to global economic situation and oil price. Rubber price slumped in the early 2000s and peaked in 2011 in tandem with rise in oil price. When Ahbisit was in power, rubber price was high and the south enjoyed prosperity. Majority of rubber farmers are small plantation holders which mades managing supply and demand extremely hard. Just who will give up their plantations to reduce supply. This problem will not go away. Thailand tried to form a tripartite caucus with Malaysia and Indonesia way back in the 1990s to control just that, supply and demand and it's still work in progress. Face it, in reality the government will have to continue to subsidies all farm products.

[Dellboy218]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

The wholesale complete and utter lack of a plan is the problem. Allowing the market to just ebb and flow with absolutely no plan at all is ridiculous. How did it come to pass that they planted this enormous new area in isaan while the supply in the south is still online?

Rice is the same. Sugar is the same. Thailand is at the top in terms of volume and yet many of its farmers still live in abject poverty.

Think Issan started growing rubber trees 7-8 years ago when the rubber price was high. Most are small enterprises and acted really on impulse and not really have that mentality to think future. Perhaps there are lack of information and advise from the Commerce Ministry. I doubt any government can predict future price of hard and soft commodities whether it's iron ore, oil, wheat or jute. While hard commodities are usually owned by large corporations that can fend for themselves, soft commodities are usually small and family businesses and will always need help from the government even in rich nations like Japan. We can't abscond from subsidizing farm products as like you said most are in abject poverty. It's a social contract that the affordable population should help their fellow poorer countrymen. Here it's exploited by politics whether as large populist policies or indiffences by the richer tax payers....

It was many years before that. At least 15 and probably closer to 20 years. They planted rubber as they were advised to by the Government farmers advisors as an alternative way to make money rather than rice. This then led to rubber tree plants available as part of a Government grant. Unfortunately this then led to arguments that those plants supplied under that grant were of poor quality or in fact, dead. Liquid latex is currently going for about 19B per Kg, it isnt worth the time and effort processing the liquid. You are right, there appears to be no overall plan, only personal agendas.

Edited October 12, 2014 by Dellboy218

[harryfrompattaya]

They will just have to wait until the prices "bounce" back.

regards Worgeordie

My wife comes from a large extended family of rubber tree farms. They tell me many farmers have borrowed against their land and those debts can't wait for a bounce back.

Perhaps someone here on TV can shed more light on this?

I guess you as well as other TV members should help out kend them the money until the price bounces back. If it was my extended family if lovable people I will give them the money no strings attachs

Do I detect sarcasm?

The fact is they are diversified and have a much better understanding of the Ag market in Thailand and SE Asia than I do and absolutely more than the expat community, in fact, they have been increasing their land holdings for years.

But thanks for your advice.

Good as you say they know what they are doing you must know that is business some years they make a lot some years a little. Being they so diversified and know so much more than you and all expats. Please do not worry about them. By the way when they were rich did they give you anything?

Edited October 12, 2014 by harryfrompattaya

[marcusd]

Everything cannot be subsidised. Subsidies mean someone else has to pay for that subsidy or the money for it.

As unfortunate as this is, there is an oversupply of almost everything on the planet. Rubber rice, wool Wheat coal Iron Ore. So China being the main purchaser of raw material selling at el cheapo prices to the west who buy most of this find themselves not wanting any more product?

Why? the western nations who are the driving force of the world economy, NOT CHINA as many think, do not want or need more products as their own economies are STUFED and they do not have the cash.

Why do I say the west is the driving force of the world economy and not China? CHINA produces, just like Thailand and if no one buys then CHINA does not sell. It is the buying nations that make things happen.

And right now, the only thing they are buying is guns for stupid wars.

[Tokay]

Supply and demand.

The gov should educate them (all farmers) on how markets work, even if only on a very basic level, and explain to them how the gov in the past screwed them royally.

[Thai at Heart]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

The wholesale complete and utter lack of a plan is the problem. Allowing the market to just ebb and flow with absolutely no plan at all is ridiculous. How did it come to pass that they planted this enormous new area in isaan while the supply in the south is still online?

Rice is the same. Sugar is the same. Thailand is at the top in terms of volume and yet many of its farmers still live in abject poverty.

Think Issan started growing rubber trees 7-8 years ago when the rubber price was high. Most are small enterprises and acted really on impulse and not really have that mentality to think future. Perhaps there are lack of information and advise from the Commerce Ministry. I doubt any government can predict future price of hard and soft commodities whether it's iron ore, oil, wheat or jute. While hard commodities are usually owned by large corporations that can fend for themselves, soft commodities are usually small and family businesses and will always need help from the government even in rich nations like Japan. We can't abscond from subsidizing farm products as like you said most are in abject poverty. It's a social contract that the affordable population should help their fellow poorer countrymen. Here it's exploited by politics whether as large populist policies or indiffences by the richer tax payers.

I know one of the owners of one of the companies and they made this move in conjunction with the govt. So I guess there was a plan to move.

The southern production is reaching the end of its lifespan so they started planting in isaan. It will provide a living for a lot of people up there.

The companies don't care. They loved the democrats when they needed them in the south. They deal with PTP to get access in isaan. They don't care who grows it.

The volume in Thailand will reduce a little soon because the volume in the south will reduce, but it will be replaced with volume in isaan. The only thing about all the exports in Thailand for all commodities is that they are virtually all controlled by Thai Chinese who have the policies they want from govt. Always.

[noitom]

It was a typical Thai student body left and student body right. Blindly leaping to a suggestion that everyone should do rubber.

[ClutchClark]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

The wholesale complete and utter lack of a plan is the problem. Allowing the market to just ebb and flow with absolutely no plan at all is ridiculous. How did it come to pass that they planted this enormous new area in isaan while the supply in the south is still online?

Rice is the same. Sugar is the same. Thailand is at the top in terms of volume and yet many of its farmers still live in abject poverty.

Think Issan started growing rubber trees 7-8 years ago when the rubber price was high. Most are small enterprises and acted really on impulse and not really have that mentality to think future. Perhaps there are lack of information and advise from the Commerce Ministry. I doubt any government can predict future price of hard and soft commodities whether it's iron ore, oil, wheat or jute. While hard commodities are usually owned by large corporations that can fend for themselves, soft commodities are usually small and family businesses and will always need help from the government even in rich nations like Japan. We can't abscond from subsidizing farm products as like you said most are in abject poverty. It's a social contract that the affordable population should help their fellow poorer countrymen. Here it's exploited by politics whether as large populist policies or indiffences by the richer tax payers.

I know one of the owners of one of the companies and they made this move in conjunction with the govt. So I guess there was a plan to move.

The southern production is reaching the end of its lifespan so they started planting in isaan. It will provide a living for a lot of people up there.

The companies don't care. They loved the democrats when they needed them in the south. They deal with PTP to get access in isaan. They don't care who grows it.

The volume in Thailand will reduce a little soon because the volume in the south will reduce, but it will be replaced with volume in isaan. The only thing about all the exports in Thailand for all commodities is that they are virtually all controlled by Thai Chinese who have the policies they want from govt. Always.

A good post with obvious insight.

Thanks

[Benmart]

I do not feel for them in the least little way. They brought this on themselves. When the prices were so high they decided to plant more and more. There is a thing called supply and demand. But they dont understand that.

Do you have even basic knowledge of the production cycle of a rubber tree operation?

Your post simply sounds like you have issues in general.

In lieu of a condescending questioning about the production cycle of a rubber tree operation, perhaps providing that information would educate readers and at the same time add to the credibility of the retort.

Diagnosing the condition of any poster is beyond my qualifications since I have neither the experience, training or education to arrive at a prognosis based soley on a post.

Edited October 12, 2014 by Benmart

[ClutchClark]

I do not feel for them in the least little way. They brought this on themselves. When the prices were so high they decided to plant more and more. There is a thing called supply and demand. But they dont understand that.

Do you have even basic knowledge of the production cycle of a rubber tree operation?

Your post simply sounds like you have issues in general.

In lieu of a condescending questioning about the production cycle of a rubber tree operation, perhaps providing that information would educate readers and at the same time add to the credibility of the retort.

Diagnosing the condition of any poster is beyond my qualifications and most likely, the same for many others.

Ben,

This is the 3rd or 4th post today you have followed me to, which begets the earlier question... Again..

It was not a condescending question at all. In fact, if you review this thread I have asked the agricultural community (farmers) on TV to provide their first-hand insights because I have an Ag history in the US and continue to find the economics of farming of interest. Your post had such authority in its animosity towards the Thai rubber tree farmer that I simply thought it must be from first-hand experience.

I have already left other posts that offer my limited knowledge of this subject matter based on personal research and listening to those who depend on rubber trees for their livelihoods. I would encourage you to read back through the thread if you are genuinely interested in my opinion.

Yours Truly

Edited October 12, 2014 by ClutchClark

[Canada]

This situation was foreseeable. What most people are whining about is actually their own lack of foresight.

[ClutchClark]

This situation was foreseeable. What most people are whining about is actually their own lack of foresight.

Hypothetically, if you were a farmer for the past 20 years, what foresight would you have used and at what point would you have used it?

Ofcourse, you have the complete advantage today of using google and hindsight and thats OK, primarily I would like to get a better understanding of your knowledge on this topic.

Cheers

[MJP]

Lot of rubber plantation is likely to be lost next year due to drought, El Nino.

I am dreading it.

[Thai at Heart]

This situation was foreseeable. What most people are whining about is actually their own lack of foresight.

Hypothetically, if you were a farmer for the past 20 years, what foresight would you have used and at what point would you have used it?

Ofcourse, you have the complete advantage today of using google and hindsight and thats OK, primarily I would like to get a better understanding of your knowledge on this topic.

Cheers

Well rubber for one is a very risky undertaking . 7 years investment with an unguaranteed return shouldn't be for the faint hearted. That said I know some people who made good money in the good times, but god knows what they make now.

Once its in though, youre in for 25 years so repent at your leisure coz its too expensive to go back.

[BSJ]

"Following violent protests in the south last summer, she doled out $80 per 0.4 acres (0.16 hectares) to help ease dropping prices." So they have received 2500 baht/rai in a government handout last year. What do they want to do, make it an annual event!

[ClutchClark]

This situation was foreseeable. What most people are whining about is actually their own lack of foresight.

Hypothetically, if you were a farmer for the past 20 years, what foresight would you have used and at what point would you have used it?

Ofcourse, you have the complete advantage today of using google and hindsight and thats OK, primarily I would like to get a better understanding of your knowledge on this topic.

Cheers

Well rubber for one is a very risky undertaking . 7 years investment with an unguaranteed return shouldn't be for the faint hearted. That said I know some people who made good money in the good times, but god knows what they make now.

Once its in though, youre in for 25 years so repent at your leisure coz its too expensive to go back.

To T@H and MJ and other intelligent posters:

How many agricultural "crops" can you name that require a 6-7 year investment before a single harvest is possible?

We have tree farms in the US; however, these were typically started on recently logged land and purchased as an investment--not a working, producing operation.

Ofcourse, there is palm oil. Don't they reach maturity in about half the time of 3 years?

What incentives did the Thailand Ministry of Agriculture offer in the past ten years to encourage other marketable products? Can anyone show me a small farmer anywhere that has the ability or experience to identify and forecast global market trends 7-15 years down the road?

For that matter, can anyone here tell me what the price of a barrel of crude oil will be 7 years from now?

Thai @ Heart, these last questions were directed more at the crowd chanting, "The farmers deserved it" and not at you for an excellent post.

Cheers

Edited October 13, 2014 by ClutchClark

[Toknarok]

The mindset a generation ago was that with the rapid escalation of the middle classes in the World particularly in places like China and India with their enormous populations the demand for motor vehicles (therefore tyres) would increase dramatically. Whilst this is undoubtedly happening, it wasn't only Thailand that realised this would occur. Other countries where rubber could be grown climbed onto the bandwagon resulting in the overproduction that we see today.

[thaiguzzi]

I wish someone would explain why prices for tires here have continued to rise the past few years? I can't find a dealer willing to sell me a set of band name tires for my car for less than 4,100 baht per tire. I get a quote when ever I stop somewhere to get air. Last time I bought tires they were a 1,000 bath cheaper each and that was when the rubber price was near the high and they all make their tires here in Thailand.

Exactly. Tire prices have not dropped. The only people making a killing in the last 18 months in rubber production are the tire manufacturers.

[ClutchClark]

The mindset a generation ago was that with the rapid escalation of the middle classes in the World particularly in places like China and India with their enormous populations the demand for motor vehicles (therefore tyres) would increase dramatically. Whilst this is undoubtedly happening, it wasn't only Thailand that realised this would occur. Other countries where rubber could be grown climbed onto the bandwagon resulting in the overproduction that we see today.

Excellent...combined with a drop in petroleum prices thereby making synthetic rubber more competitively priced.

[ClutchClark]

And for the earlier post to MJ and Thai@Heart,

I should have included these products as sharing some similarity to rubber tree farms:

Orange groves, apple orchards, cherry farms, vineyards and macedamia trees.

Each of these involve a large up-front investment of time before they are commercially productive.

[Thai at Heart]

And for the earlier post to MJ and Thai@Heart,

I should have included these products as sharing some similarity to rubber tree farms:

Orange groves, apple orchards, cherry farms, vineyards and macedamia trees.

Each of these involve a large up-front investment of time before they are commercially productive.

How long do most Thai orchard products take to reach maturity? Mangoes? Rambutans?

[ClutchClark]

And for the earlier post to MJ and Thai@Heart,

I should have included these products as sharing some similarity to rubber tree farms:

Orange groves, apple orchards, cherry farms, vineyards and macedamia trees.

Each of these involve a large up-front investment of time before they are commercially productive.

How long do most Thai orchard products take to reach maturity? Mangoes? Rambutans?

Thai, are mango orchards typically a single source of income for mango farmers? My relations have commercially harvestable mango trees but they are simply 10-15 trees growing throughout their property to supplement other products like bananas and pineapples, etc--rather than being the single income crop like many rubber tree plantations I have seen.

I have seen some mango trees that are easily 30 meters tall and I would guess 30-40 years old. Not sure the specific variety.

[Thai at Heart]

And for the earlier post to MJ and Thai@Heart,

I should have included these products as sharing some similarity to rubber tree farms:

Orange groves, apple orchards, cherry farms, vineyards and macedamia trees.

Each of these involve a large up-front investment of time before they are commercially productive.

How long do most Thai orchard products take to reach maturity? Mangoes? Rambutans?

Thai, are mango orchards typically a single source of income for mango farmers? My relations have commercially harvestable mango trees but they are simply 10-15 trees growing throughout their property to supplement other products like bananas and pineapples, etc--rather than being the single income crop like many rubber tree plantations I have seen.

I have seen some mango trees that are easily 30 meters tall and I would guess 30-40 years old. Not sure the specific variety.

They can be a single source in some places. Of course they are a final product and so don't need value added.

I know of one family that had 16000 rai of oranges all converted to rubber now. I suppose at areas like that its the difference between a huge amount of money every year and a lot of money every year.

No one is starving.

[Mosha]

http://www.thaivisa.com/forum/topic/467163-rubber-trees/page-111#entry8526853

ASEAN countries are trying to do something.

[Mosha]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

It goes way back before PDRC, before Abhisit's administration in fact.

You misunderstand me. What I was referring was that the rubber farmers did the heavy lifting in the recent shutdown only to see their fortune have not improved while others got their intended results. No way the 7 months were the cause of poor rubber price.

Rubber super cycle comes and goes according to global economic situation and oil price. Rubber price slumped in the early 2000s and peaked in 2011 in tandem with rise in oil price. When Ahbisit was in power, rubber price was high and the south enjoyed prosperity. Majority of rubber farmers are small plantation holders which mades managing supply and demand extremely hard. Just who will give up their plantations to reduce supply. This problem will not go away. Thailand tried to form a tripartite caucus with Malaysia and Indonesia way back in the 1990s to control just that, supply and demand and it's still work in progress. Face it, in reality the government will have to continue to subsidies all farm products.

Rather than oil it's Natural Gas prices. Synthetic rubber is made with natural gas and the gas price is very low.

[Mosha]

"Following violent protests in the south last summer, she doled out $80 per 0.4 acres (0.16 hectares) to help ease dropping prices." So they have received 2500 baht/rai in a government handout last year. What do they want to do, make it an annual event!

Wife did not get 1 cetang out of it