Raw Material Production Declines Thailand, Indonesia And Malaysia Natural Rubber Production May Decrease By 859,000 Tons

- Sep 25, 2020-

The International Tripartite Rubber Council (ITRC) said on Wednesday (September 23, 2020) that natural rubber production is expected to decline in the rest of 2020, and the decline will continue until early 2021. According to ITRC, the production of natural rubber in Thailand, Indonesia and Malaysia in 2020 is expected to decrease by at least 859,000 tons from the 8.79 million tons in 2019. The new crown epidemic affects rubber tapping, the weather is changeable, and leaf disease has led to a decline in production.

During the outbreak of the new crown pneumonia, the Thai government implemented a ban in response to the epidemic. It is not easy for foreign workers to enter Thailand. The shortage of rubber workers has caused production losses, especially the shortage of raw film. This year, Thailand's production areas have more rain than previous years, resulting in rubber tapping. There are interruptions from time to time. Insufficient rubber workers and excessive rain, Thailand's natural rubber production is expected to decline.

Indonesia's Palembang area transitioned to the cut-off period, and production was significantly reduced. There is more rain in Medan, which affects the rubber tapping process. However, with the gradual recovery of demand in the European and American markets, the export situation of printed labels has improved, and rubber farmers are still enthusiastic about rubber tapping.

Malaysia is the world's largest producer of latex gloves, among which top gloves are the largest. The outbreak of the new crown pneumonia has led to a surge in demand for medical gloves. It is reported that there are more than 40 processing factories for top gloves. In the case that new customers' orders are not accepted, the orders have been scheduled for next year, which greatly stimulated the demand for natural latex. Natural latex is diverted from raw materials, and Malaysian standard rubber processing plants are rushing to buy raw materials. In recent months, the supply of horse standard is tight.

ANRPC's latest report stated that in the first seven months of 2020, global natural rubber production fell by 8.9% year-on-year, and global natural rubber consumption fell by 14% year-on-year. According to the preliminary values of various countries as of July 2020 and the expected data for the rest of the year, global natural rubber production in 2020 is expected to fall by 4.9% year-on-year to 13.149 million tons, and global consumption will fall by 8.9% year-on-year to 12.544 million tons.

The development of natural rubber consumption in the short- and medium-term markets depends to a large extent on the recovery of the global economy and the recovery of the automobile industry and transportation industry. As China’s economic activities accelerate, natural rubber consumption is expected to increase. The decline in global natural rubber production may promote rubber prices to a certain extent.