This research explores the appropriate rubber pricing model and the consistent empirical evidence. This model has been derived from the utility function and firm profit-maximization model of commodity goods. The finding shows that the period t – 1 affects expected commodity price and expected profit of commodity production. In fact, a change in the world price of rubber in the past period led to a change in the expected price of rubber in the short run which influenced the expected rubber profit. As a result, the past-period free on board price has an entirety effect on expected farm price of rubber given an exchange rate. In addition, the rubber pricing model indicates that the profit of local farmer on rubber plant depends solely on the world price of rubber in the short run in case of Thailand. In an empirical study, it was found that a change in the price of ribbed smoke sheet 3 in Singapore Commodity Exchange significantly and positively determined the fluctuation of rubber price at the farm gate in Thailand which was consistent with the behavior of the Thai farmers. Both prices are also cointegrated in the long run. That is, the result states that the VECM is an appropriated pricing model for forecasting the farm price in Thailand.

Abstract
1. Introduction
2. Literature Review
3. Research Methods and Materials
    3.1. Model Specification
    3.2. Material and Methods
4. Results and Discussion
5. Conclusion
References

• Pithak SRISUKSAI(School of Economics, Sukhothai Thammathirat Open University) Corresponding Author