Isaan Expat Forum

Rubber Tree Farming => Getting Started => Topic started by: USA Expat on July 21, 2012, 07:37:47 AM

Title: What is the financial return on a rubber tree farm in Thailand?
Post by: USA Expat on July 21, 2012, 07:37:47 AM
How much money will a rubber tree farm in Thailand make?

A rubber tree farm in Thailand can produce anywhere from 200 to 400kg of rubber per rai, per year.  There are many different reports from many sources about how much rubber your trees can produce.  I have a friend who says his farm of 8,000 trees are averaging about 1kg per tree per month.  For our purposes, we will stay conservative and use an average from the Thailand agriculture department of about 276kg per rai annually.

With 25 rai, that amounts to 6,900kg per year.  Prices for hard cup rubber today is about 60 baht per kg, but it has varied from as low as 40 baht to as high as 95 baht.  Using the 60 baht price, that would be 414,000 baht per year.

HOWEVER, based on my experience, and after talking to other rubber tree farmers in the area, the .5kg per tree per month is more plausible: 25 rai would be about 1,000kg per month, or 12,000kg per year, or 720,000 baht annually.  Or a monthly income of 60,000 baht.
Title: Re: What is the financial return on a rubber tree farm in Thailand?
Post by: Seka Expat on July 30, 2012, 10:43:29 AM
It should be noted that it is not possible to give precise predictions of income from rubber, since there are many factors affecting income.

It would be more accurate and realistic to talk about production figures according to the type of rubber you produce. Cup rubber (rainy season) will produce more kilo's than Rss3, which is the dried and smoked sheet.

I estimate a 40% weight loss from wet sheet to dried sheet after a 2 week drying period, but prices are greater for the dried sheet and you can keep them longer than cup/ball rubber. Ball rubber cannot be stored for long periods, unless you choose to make a crepe rubber from them, which is another process whereby you can dry and keep your rubber.

The advantage of keeping rubber is that you can determine when to accept the prevailing market price, rather than being forced to sell immediately! Therefore dried rubber gives you the decision making and control!

Production has many variables such as weather! Heat, cold, wet, dry and wind all have their own influences according to the seasons and time of year! Wind can dry the cut and latex will dry and restrict flow, rain can wash you out, heat can cause drying, cold can increase turgor pressure and squeeze out the latex! Time of day or night that you cut your trees will determine prevailing temperature and directly affect production too, when season allows, cutting at night is the norm, but during the rainy season teams cut whenever it is dry enough. We have on one occasion gone 6 days without a cut due to rain! This affects your production.

Factors such as soil types will have a direct bearing on how well your trees will grow and produce, how and what you feed you trees with. Irrigation as mentioned in another post. Land maintenance and weed clearing are helpful Tree maintenance as they grow and how you cut off side branches and at what height!

Another important factor and one that needs to be right at the planting stage is the quality of your baby trees! I have found a marked difference between the growth rates of smaller root stocks to larger one’s. The larger root stocks do grow and mature quicker, whereas the smaller one’s remain puny and small for a long time! Extra feeding makes no difference. Many Thai’s say Mai Bpen Rai, or it does not matter. Who you listen to will decide your production and income. At the nursery I will would choose my own baby trees and don’t let the Thai helpers give me their worst trees! (I have finished planting). Look at the size of your little finger and compare to your thumb. If this were the difference in your baby trees, which would stand the best chance? Always in nature, the biggest wins!

After planting, loss of new trees due dry conditions can be a factor, irrigation is key to survival! If you have to re plant, then well established trees a year older will have an advantage over second year plantings. Third year re planting is a waste of time and money as they will never grow unless drastic measures are taken. If you do this you will need to cut the leaves and branches on neighbouring trees to give the smaller one’s enough sunlight to survive!

One of the most important factors is at what stage you first open your trees, if too small you will stunt their future growth. This is a scenario seen many times over here in Thailand. When you open the veins of the tree you must realize that you are in effect taking the life blood of the tree to produce your income, yet you must leave enough to let the tree continue it's growth!

Whether you cut 2 or 3 faces will affect quantities of latex as will the angle of your  cut. These two last factors determine the number of vessels you open and therefore the production and future health of your trees!

How deep or shallow you cut into the tree will also have a great bearing on your income, too deep is harmful, to shallow will not produce a flow of latex, much will depend on the expertise of your cutting team. Just don't allow anyone and I mean anyone to practice on your trees. They must demonstrate their skill before we take on any new team!

The age or maturity of your trees will also be a major factor. As will the specific type of tree and planting density. I have observed the production of my father in law, prior to planting my own trees back in 2002. I witnessed production of an average of 1.7 kilo's per tree per month and this was in October/November of 2002 back when price per kilo was 18 baht. My father in law had 400 trees at that time, but by averaging his production, I could work out according to the scale of my own project, what I was likely to achieve. His trees were 12 years old at that time. Now at 22 years old they are huge, healthy and still producing well! I downsized the 1.7 kilo and work on 1 kilo per tree per month on average for 9 months of the year.

You must remember that the normal remuneration for your team will be 40% of the production or sale price, so factor this into your calculations too!

So on to market price! There can be huge fluctuations at any given time and there are seasonal influences as well as oil price influences.

Last I knew 80% of world production comes from south east asia, which includes Indonesia, Malaysia and Thailand! A pretty big market! Approximately 20% of world rubber produced is natural rubber.

So how much money can you make?? It's anyone's guess. You can work out estimates and one person can tell you this and another that. No one can really tell you because they cannot predict the weather, or control the care of your trees or where you plant them, you can only make an approximation since all factors mentioned above and more can come to bear on your venture.

A Thai may tell you one thing and a foreigner will tell you another, just work things out for yourself!

A simple sum would be 1kg/month x 80 (12 year old trees) per rai x how many rai x market price minus 40%! This will be near the mark, but not precise!

Given all the factors mentioned above you can arrive at only a general figure!

If price is 60 for cup/ball rubber baht using the above calculation, then monthly income will be 4,800 baht per rai.

Your 60% take will produce 2,880 baht per rai. If price doubles to 120 baht, but production halves, you get the same!

If price doubles to 120 baht and production doubles, then you get 11,520 baht, which is an attractive figure, but if price halves to 30 baht and production halves at the same time, then you get 720 baht, which is not attractive.

So this calculation shows you why not one person can tell you exactly how much you can make with rubber.

You just have to use the best prctices you can to get the best production, after that find the highest price the market will pay you! That’s business! Good luck!