Natural Rubber Price Research Articles

THE rubber tree is one of the so-called trees . This group includes cocoa, coconut, citrus, and a number of other trees yielding fruit or nuts or bark or latex. Each has its own foibles -for example, young cocoa usually needs the sunshade of another kind of tree, but all have broadly the same economic life-history. First, the land must be cleared and prepared for planting. As a rule, the young trees must be protected from animals. Most types begin to bear only after five to seven years-seven in the case of rubber. Hence there is a considerable time before they are established and begin to yield some return on the original investment. Then comes the long period of yielding. As a rule the yield increases for the first few years, reaches its peak about ten or twelve years after planting, stays there for about fifteen years, and then begins to fall off. A tree may continue to yield something until it is over fifty or even a hundred years old, unless it dies from disease or is blown down in a storm, but trees will probably be abandoned or replaced by something better long before that. During this period, the income from the trees is of the nature of economic rent. Yields may vary with the amount of manuring or weeding, but the cost of extracting some yield is often quite low. Nutmegs, to take an extreme case, fall to the ground when they are ripe and have only to be picked up. Hence large outputs are likely to continue to come forward even when prices are very low. An example is the large quantities of rubber which continued to come forward from the Netherlands East Indies during the 'thirties. even when the net return to the native producer was less than twopence a pound. On the other hand, prices may remain very high for a long time because, although output from existing trees can be somewhat increased, it takes several years for new trees to be planted and to come into bearing. This happened with rubber in the late 'twenties. It will never happen again. So long as a fairly good substitute can be produced synthetically for about iod. or iid. a pound, the price of natural rubber will not remain for long above say Is. a pound at most. Finally there is the problem of replacement, by replanting on the same land or by new planting on land not at present under that crop. Clearly, a producer who wishes to maintain his capital intact must

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