Movement Restrictions Accelerate Malaysian Rubber Farmers' Abandonment, Leading Natural Rubber Producer Is Threatened

- Dec 23, 2020-

In order to prevent the continued spread of the new crown pneumonia epidemic in Malaysia, the government initiated a movement restriction order. The Malaysian Association of Small Rubber Plantations (NASH) said that as more rubber tappers abandon their small plantations, movement restrictions have made things worse. Movement restrictions have resulted in 50,000 hectares of rubber land being left unused in 2020 alone. At present, more than half of the rubber production areas in Malaysia are idle, which poses a threat to the country's status as a leading producer of natural rubber.

Data show that due to lack of sufficient workers to maintain rubber plantations in Malaysia, 683,000 hectares of the 1.2 million hectares of rubber plantations are left unused. Malaysia's rubber production (dry rubber and latex) dropped sharply from 1.28 million tons in 2006 to 639,830 tons in 2019. The government has made some efforts to increase rubber production, especially latex, and allocated 16 million ringgits to establish "latex production corridors" in traditionally non-rubber producing states such as Pahang, Terengganu and Kelantan.

Abdul Halim Hassan, a member of the Nash Supreme Council, said that this kind of funding does not seem feasible if the oversupply is not resolved and the import of cheap natural rubber is not restricted. The supply of low-priced latex is abundant and increasing, especially in Thailand (estimated to produce 1.2 million tons of latex per year) and Vietnam. At the same time, domestic downstream industries can obtain unlimited and cheaper imported natural rubber from Thailand and Vietnam, especially latex used to make gloves.

Medical gloves are made of natural rubber latex or synthetic rubber latex. Initially, most medical gloves were made based on natural rubber latex. However, due to the increase in allergies to natural rubber latex in the United States and other major importing countries, more and more buyers choose to order gloves made of synthetic rubber latex. The demand for this poses a threat.

Abdul Halim Hassan said that gloves and other latex-based products need to guarantee long-term supply, and local manufacturers are seeking to secure supply from other sources to maintain their business. In addition, fluctuations in raw material prices and increased latex allergies have led to increased demand for synthetic substitutes, which poses a threat to natural rubber.

Malaysian local time on December 14 official data show: Malaysia's natural rubber production in October increased by 5.4% to 48,663 tons, 46,187 tons last month; October production increased by 0.3% year-on-year. Natural rubber exports in October increased by 11.8% month-on-month to 54,492 tons; China remained the main destination, accounting for 58% of the total in October. In October, natural rubber stocks increased by 0.6% from the previous month to 256,724 tons.

From January to October, my country imported about 750,000 tons of natural rubber from Malaysia; my country imported 2.6 million tons of natural rubber from Thailand, accounting for about half of the total imports; Vietnam imported 1.16 million tons of natural rubber. These three countries account for 85% of my country's total natural rubber imports.