The global economy in 2021 is expected to recession. The International Monetary Fund (IMF) expects world’s GDP growth to contract at 4.4% and recover at 5.2% in 2022, mainly affected by the slowdown economy, US-China trade war, and the second phase of the Covid-19 outbreak. However, there is a positive factor from the news of the Covid-19 vaccine, expected to receive broad approval in the first quarter of 2021 and will solve the Covid-19 pandemic. Moreover, China’s economic recovery is another factor that help the global economic outlook. In 2021, China’s economic growth is expected to be one-third of the world’s economic growth. However, to reduce the impacts of the Covid-19 outbreak, entrepreneurs must closely monitor the situations and prepare to handle them in case the Covid-19 pandemic gets worse.

The rubber scenario in 2021 is expected to slow down in line with global economic growth due to economic factors, exchange rate, and volatile crude oil prices in the global market. According to the Association of Natural Rubber Producing Countries (ANRPC), the world’s natural rubber production is projected to decrease by 6.8% in 2020 due to the slump in rubber prices, climate change, and the outbreak of leaf fall disease caused by Phytophthora in Indonesia, Malaysia, and Thailand. The world’s natural rubber consumption is forecast to decrease by 7.3% in 2020 and increase by 8-10% in 2021. The Economist Intelligence Unit expects growth in global NR production to down 4.6% in 2020 and will up 5.6% in 2021.

However, the Thai Rubber Association has a positive attitude towards the rubber market outlook because it has great economic fundamentals; especially, the increase of the world's rubber gloves demand due to the Covid-19 outbreak. Bualuang Fund projects that the growth of global rubber gloves demand will increase by 25% and 20% in 2020 and 2021, respectively, because the pandemic has changed the long-term structure of rubber gloves demand. Furthermore, Thailand, Indonesia, and Malaysia, member countries of the International Tripartite Rubber Council (ITRC), strongly collaborated in rolling out significant measures to handle various situations. Due to the shrinking economy affected by the Covid-19 pandemic, the Thai government has rolled out support measures for smallholders and entrepreneurs as follow; 1) The Rubber Farmer Income Insurance Program, Phase 2; 2) Farmers' Institutional Potential Development Project to Stabilize Rubber Prices and a Project to Build Stabilize Rubber Prices; 3) Credit Support Program for Working Capital to Rubber Wood and Rubber Product Entrepreneurs (credit limit 20,000 million baht); 4) Credit Support Program for rubber product entrepreneurs (credit limit 25,000 million baht); and 5) adding the aid activities for the entrepreneurs of dry rubber during the Covid-19 outbreak.

In conclusion, the Thai Rubber Association strongly believes in the long-lasting relationship and corporation with the concerned sectors i.e. government agencies, private sector, rubber farmers as well as the three largest natural rubber producers, namely Thailand, Indonesia, Malaysia, and other rubber producing countries in the ASEAN to provide strategic direction and solution to falling prices in short term and long term and ultimately to stabilize the rubber prices.

On the occasion of the New Year 2021, I extend to you and your family our warmest greetings, wishing you a happy New Year, your career greater success, your family happiness, and your perfect health and lasting prosperity.

Mr.Chaiyos Sincharoenkul

President

The Thai Rubber Association