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Asian Viewpoints

Delays in natural rubber production in Southeast Asia

Natural rubber production is restarting as the COVID-19 outbreak begins to ease in Southeast Asia. However, natural rubber production in the April-June quarter is expected to decline from the same quarter of the previous year due to stagnant economic activity in many countries. Further, rubber is not harvested as bad weather. By country, the number of people infected with COVID-19 decreased to single digits in May in Thailand, Malaysia, Vietnam and Cambodia, while the situation is still serious in India and Indonesia. In Thailand, although economic activity in some regions has begun to recover and the natural rubber harvesting season has started from late April, the yield is not high due to bad weather. The yield is expected to return to normal after June. In Malaysia, although production recovered, the production quantity is limited owing to impact from COVID-19. In Indonesia as well, the impact is large for the natural rubber industry as economic activity is restricted due to COVID-19. Since natural rubber produced in Indonesia is mainly exported to Europe and the US and COVID-19 infections in those regions continue, it seems difficult for demand to recover in the short term. In addition, although Vietnam and Cambodia resumed production from late April, supply is likely to be insufficient as bad weather continues and it is difficult to harvest rubber in May. Under these circumstances, natural rubber futures markets in Asia have been steady in view of supply tightness.

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