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Thailand’s Natural Rubber Industry-Past and Future

Thailand’s Natural Rubber Industry-Past and Future2019.06.12

Thailand has grown to become the world’s largest producer and exporter of natural rubber since the early 1900s. Thanks to the monsoon climate which is highly conducive to rubber tree cultivation, Thai rubber producers can get roughly 1.76 tons of rubber per hectare.


Rubber is exported in a number of basic forms, including ribbed smoked sheets (RSS), technically specified rubber (TSR), concentrated latex (CL), and compound rubber (CR). In 2017 alone, the country produced over 4.56 million tons of natural rubber, accounting for almost 36% of the world’s total natural rubber production, followed by Indonesia, Vietnam, China, Malaysia and India.



(Data Source: Thai Rubber Association)


Though the small landholders dominate the rubber plantation and hold 95% of the planting area, the rubber sector in Thailand is controlled by large processing plants that purchase the raw materials from local dealers. According to the data from the International Trade Center, Thailand has been the world’s largest natural rubber exporter in the past years.

(Data Source: ITC)


The largest market for Thai natural rubber has been China, but presently Thailand is facing increasing competition from neighboring countries such as Cambodia, Laos, Myanmar and Vietnam, which have established their own plantations, many of which have been funded by Chinese companies.


Thailand’s major customers in 2018 for natural rubber

Total =3,525,915 metric tons

(Data Source: Thai Rubber Association)


Moreover, demand growth for rubber in the tire industry has slowed. But supply of raw material has generally outpaced growth in demand, which has created an opportunity for businesses to develop value added products which can take advantage of an abundant local supply of raw material at stable prices, particularly, in the medical field, manufacture of medical and surgical gloves, condoms, catheters, feeding tubes and IV tubes all are potential targets for investment.


Therefore, the goal for the Thai rubber industry is to develop sophisticated technology and generate added value, thereby enhancing its competitiveness.
 

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