The economics of rubber growing is very complicated and returns are difficult to assess. The following figures are just a guesstimate of the costs and profits that can be obtained from rubber farming. There are too many variables to give concise figures but hopefully they should provide a ball park figure for anybody thinking about investing in rubber. One thing to remember is that it requires a considerable outlay for 6-8 years before any returns are made.
These are the Assumptions I have made to come up with these figures
The price of land not included – varies two wildly.
Pay for 1 days labour 200 bahts ( could be more , could be less)
You fertilise the trees 3 times a year
Weeding can be done either by Hand, by spraying with weed killer , or by use of a tractor, I have assumed the purchase of a small tractor which can be used for cutting the weeds , transporting fertiliser ( on a trailer) and other ongoing jobs- this really does start to become a necessity the more trees you have. The economics of buying a large tractor is debatable since the only advantage is that it can be used in the initial ground preparation and ploughing which a small tractor can’t .
Cost of hiring a tractor & driver for initial ploughing 200 baht a rai – again rates can vary considerably. Ploughing is required for the first few years only to get rid of the hardier weeds and bushes thereafter just cutting down the weeds should be sufficient – in fact continued ploughing is detramental as it can damage the roots.
Before we had the tractor we employed people on a piece rate for clearing the weeds around the trees at a rate of 3 bahts per tree ( this has probably increased now) . So you could work out the cost of weeding based on this figure . However to weed between the rows would still require the use of a small tractor ( to get close to the trees) or one of the pertrol driven strimmers – which would take considerably more time and man power.
We have 5,000 trees , so for the cost of weeding alone 3 times a year at 4 bahts a tree for 7 years gives a figure of 120,000 bahts . So it does start to make economic sense because at the end of 7 years you still have the tractor and the trees still have to maintained and fertilised for another 25 years.
Pruning – Can done by yourself – zero cost – and only needed for the first 3 years – we own 5,000 trees which I pruned myself every time I came over on Holiday
No inter cropping – This is something we don’t do so I can not give an opinion on the economics of this – Although I assume it must be profitable in some situations otherwise it would not be carried out by some farmers.
My initial estimates were calculated on 1000 trees since this is the size of one of our plantations and easy for me to work out the rough ongoing costs . I have converted this into the maintenance costs per Rai assuming a planting density of 80 trees per rai.
I have assumed it takes 7 years for the trees to reach sufficient size before they can be tapped .
We buy fertiliser in 25kg bags (310bahts a bag) from trmthailand . This is fertiliser specially prepared for Rubber trees and contains Nitrogen, Phosphate, Potassium and Magnesium. Here is a bag showing the amounts to give to the trees.
For those that don’t read Thai
Small tree 50 grams
Small Tree 1-2 Year 100-500 grams (3-5 times a year)
Rubber 2-6 years 200-500 grams (1-3 times a year)
Trees being cut 1kg (1kg 1-3 times a year)
Therefore if we take the top and bottom figures and average them out we come up with figures of 1,400 grams a tree for years 1-2 and 850 grams a year for years 2-6. Hardly scientific I know but we have to come up with a figure from somewhere
Start up costs – 1st year
Small tractor( with attachments) 220,000 Baht
Seedlings per Rai 30 * 80 = 2,400 baht
Labour per rai for planting 500
Fertilser /rai 400 baht
Other costs not included
Purchase and clearing land
Fencing off land
Price for collection cups
Acommoditaion for our labourers
Ploughing/weeding * 3 800
fertilise 1,400 baht
fertilise application 400
Total 2,600 * 2 = 5,200 Bahts /Rai
Weeding * 3 800
Fertilser 850 bahts
fertilise application 400
Total 2.050 * 5 = 10,500 bahts/Rai
Fertiliser *3 3000 bahts
labour 400 baht
Therefore ignoring Initial Start up costs which is dependent upon the number of Rai you purchase it will cost approx 15,700 bahts /Rai in maintenance costs before you see any returns. I have seen other estimates of nearly double this figure which is not inconceivable – depending on the amount of effort required to keep the land maintained and the amount of fertiliser needed in reality.
Therefore if you have 50 Rai it will cost you approximately 785,000 Baht minimum but realistically it will probably cost you closer to a million baht.
This is the contentious area are so I have come up with the following from various sources
Many high-yielding clones have been developed for commercial planting. These clones yield more than 2,000 kilograms of dry rubber per hectare per year, when grown under ideal conditions.
This equaites to 315 kg/Rai
Source: World Rubber Statistics
Thailand production from 18,41,280 hectare (11,508,000 rai) in 2009 was 3,229,000 Tonnes
This equates to 280kg/ Rai
18,000 hg/ha for Thailand in 2005.
This equates to 288 kg/Rai
Source: Office of Agricultural Economics
These are the best figures of all provided by the Thailand agriculture department
|Year||Planted area(1,000 rai)||Harvesteded area(1,000 rai)||Production(1,000 Tons)||Yield per rai?(Kgs.)||Farm price(Baht/Kg.)|
Remark : , ** August 2010
See here for latest 2010 figures
Looking in all the forums you see figures banded about of up to 600-800kg a Rai but no evidence as to where theses figures come from. In fact if you look at the predicted yields for the very latest hybrids they give figures of up to 450kg per rai. I have calculated yields based on profit we made last year given the price of rubber at the time and came to a figure of 250kg/Rai which is inline with the above figures.
It can be argued that the above figures include older trees producing lower than average yields. But if you look over the 9 year period yields have remained relativley constant and during this time new trees must have come into production and old ones removed.
By Comparison Indonesian Yields
828 kg per hectare a year on the average
Which equates to 134 kg/Rai which is a lot lower than Thai Yields
We sell at the gate and therfore get Gate price for our rubber. Although the price is slighly lower most small to medium sized plantations opt to sell in this manner to save on transportation costs.
The rubber is weighed and once a price has been agreed the buyer loads it up and takes it away.
You can opt to take it to take it to the main buyers themselves but this means frequent trips to town and the additional expense of transporting it.
|Yearly Income From 50 Rai @ 1800 kg/ha or 300 kg/rai|
|Price per kg||Gross income||Income after harvest( less 40%)||Income after expenses(fertiliser)(170,000 baht)||Monthly Income|
There are a few websites with the latest Rubber prices
During the worst of the credit crunch prices fell to 35 bahts a kilo At this level returns for your investment are drasticly reduced.