The Surge In Demand For Rubber Gloves Boosts The Thai Rubber Industry, And Natural Rubber Prices May Rise In The Second Half Of The Year

- Jul 09, 2020-

Thailand is the world's largest natural rubber exporter. In 2019, the output of natural rubber was 4.8 million tons, and the export volume was as high as 3.97 million tons; rubber exports directly affect the national economy. However, during the period of New Coronary Pneumonia, the overall global demand for automobiles fell sharply, especially during the blockade measures; the global economic recession and the overall sluggish business sentiment hit automobile demand. Thailand's rubber exports are restricted, and the natural rubber industry may remain sluggish this year.

It is understood that Thailand ranks fourth in the export of rubber products and processed rubber, second only to China, Germany and the United States. The total export volume in 2019 was US$ 11.2 billion, a year-on-year increase of 2%. Major markets include the United States, China, Japan, ASEAN, and Australia, with auto tires accounting for 51% of shipments, followed by synthetic rubber and rubber gloves, accounting for 19% and 11%, respectively.

In 2019, Thailand's rubber glove production exceeded 20 billion pieces, and exports accounted for 89% of total production. The export made a profit of 1.2 billion US dollars and became the third largest exporter of rubber gloves, second only to Malaysia and China. The new crown pneumonia epidemic has led to a surge in global demand for rubber gloves, driving the development of Thailand's rubber gloves industry. In the first four months of 2020, Thailand's rubber glove exports increased by 16% year-on-year to US$449 million.

It is understood that market shipments with which the Free Trade Agreement (FTA) has been signed by Thailand have grown well. Exports to China increased by 130% to US$31 million, followed by Australia (+79%, US$9.6 million), ASEAN (+77.1%, US$18.3 million), South Korea (+55.3%, US$7.9 million), and India (An increase of 28.5%, US$8.3 million). Exports to certain markets that do not have free trade agreements are also growing. Exports to the United States increased by 9.1% to US$194 million, and exports to Brazil increased by 69.4% to US$11.6 million.

Luckchai Kittipol, Honorary President of the Thai Rubber Association, said that this year Thailand’s natural rubber production is estimated to remain at about 4.7 million tons, with exports of about 3.8-3.9 million tons. Due to the global pandemic caused by the virus pandemic, exports are expected to fall by about 10% from 170 billion baht last year. Thailand has taken relevant measures several times to promote the consumption of domestic natural rubber. The development of the rubber glove industry is one of them.

At the end of June this year, Thai Agriculture Minister Charengchai revealed that Chinese state-owned enterprises intend to invest in the construction of a rubber glove factory in the Thailand Rubber Bureau Park in Nakhon Si Thammarat, covering an area of 20,000 Lai, with a planned annual production of 1.8 billion pieces. The Ministry of Agriculture of Thailand is studying to develop the above-mentioned factory into a rubber production center in Thailand to promote the Thai rubber industry to become a comprehensive and innovative rubber product production center, to maximize the use of domestic agricultural products and to stabilize rubber prices. In April, the Thai Rubber Authority plans to cooperate with agricultural research institutions and private companies to establish a rubber gloves and medical gloves factory.

Thailand’s largest natural rubber producer and trader, Thailand’s Shi Dong Rubber Group subsidiary, Shi Dong Gloves (Thailand) Co., Ltd. will raise funds of about 15 billion baht (about 3.423 billion yuan) through an initial public offering (IPO). Adjust the production system, expand rubber gloves production capacity and repay debts.

According to the latest revised data from the Association of Natural Rubber Producing Countries (ANRPC), global natural rubber production is expected to fall by 4.5% to 13.2 million tons in 2020; natural rubber demand is expected to decline by 7.5% to 12.67 million tons. 11.2% and 21.3%, because popular viruses have suppressed demand and put the industry in crisis. The development of the Thai rubber industry has encountered a major crisis. The development of the rubber glove industry may promote the Thai rubber industry. Luckchai Kittipol expects that the overall rubber price may rise from an average of 50 baht per kg from now on due to the increase in demand for rubber gloves and stable oil prices in the second half of the year. 3-5%.