Global natural rubber production is set to fall short of consumption for the fifth consecutive year in 2025, as high prices continue to fail in encouraging tapping activity in major producing countries like Indonesia and Vietnam, according to a senior industry official.
Lekshmi Nair, senior economist at the Association of Natural Rubber Producing Countries (ANRPC), told on Wednesday that despite growing demand from countries such as China, India, and Thailand, production is struggling to keep pace. This is largely due to low prices that prevailed until recently, with only a modest price increase last year.
The ongoing production shortfall is expected to help sustain firm global rubber prices, which surged to a 13-year high in late 2024. However, this price increase is likely to result in higher production costs for tyre manufacturers, further exacerbating the economic pressures on the industry.
According to ANRPC projections, global rubber production is expected to rise by a modest 0.3% to 14.9 million metric tons in 2025. In contrast, demand is projected to grow at a much faster rate of 1.8%, reaching 15.6 million tons.
Rubber prices, which had lagged behind other plantation crops like oil palm, coffee, and cocoa for over a decade, experienced a significant surge in the final quarter of 2024. This increase was driven by erratic weather patterns that disrupted production in key Asian rubber-producing nations.
The current rubber shortage can be traced back to several years of low prices, which led to reduced replanting, a slowdown in new planting efforts, and a shift in focus towards more profitable crops, according to Nair. In Indonesia, the world’s largest palm oil producer and second-largest rubber producer, the decline in rubber production is primarily due to farmers opting for oil palm cultivation instead, which offers higher financial returns.
For 2025, Indonesia’s rubber production is expected to drop by 9.8% from the previous year, totaling 2.04 million tons. Vietnam, the third-largest producer, is projected to see a smaller decline of 1.3%, reaching 1.28 million tons. Meanwhile, Thailand, the world’s leading rubber producer, is forecast to experience a 1.2% increase in production after a slight 0.4% dip in 2024.
Despite increased production in West African nations like Ivory Coast, the growth in these regions remains insufficient to meet rising global demand and compensate for losses in Southeast Asia. Nair noted that while demand from China and India—both major global consumers of natural rubber—is set to increase by 2.5% and 3.4%, respectively, it will still outpace supply in the coming years.
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