The rubber scenario is expected to improve in 2018 in line with the global economic growth. The International Monetary Fund (IMF) projected the world economic growth at 3.7% in 2018 from 3.6% this year, driven mainly by emerging markets and developing countries. In 2018, USA’s growth is expected to improve by 2.3% from 2.2% this year, resulting in positive Thai exports to USA, especially those of automobile and auto parts. India will be Asia’s fastest-growing large economy, which is expected to grow by 7.4% in 2018 from 6.7% this year. Brazil, one of the major rubber markets is to grow by 1.5% next year from 0.7% this year. China’s economic growth will slow to 6.5% next year from 6.8% this year due to the accumulation of debt in China. Japan will grow only by 0.7% next year from 1.5% this year.

In terms of natural rubber outlook, it is necessary to take into account factors on production, consumption demand and surplus. The Rubber Economist forecast that world NR production during 2017-2019 will grow at an annual rate of 3.7%, resulting in the output of 13.9 million tonnes in 2019. The total global NR consumption will grow at a slower rate of 3.0% during 2017-2019. NR demand is forecast to reach 13.75 million tonnes in late 2019. The Economist Intelligence Unit forecast that global NR production is expected to increase by an annual average of 2% in 2018-19 despite La Niña, which is typically leads to heavy rains in South and South-east Asia and drought in Latin America. Growth in annual NR consumption is expected to average 2.3% in 2018-19 due to the rising car sales in emerging countries and solid global economic growth.

The Thai Rubber Association has positive attitude towards rubber market outlook since natural rubber contributes to economic growth. Besides, The International Tripartite Rubber Council (ITRC) and Thai government have been providing solutions to falling rubber prices with various schemes. This mechanism will ensure a better rubber situation. The promising projects of ITRC comprise the following: Supply Management Scheme, Agreed Export Tonnage Scheme, Demand Promotion Scheme, the establishment of Regional Rubber Market and Prize Competition Project for Rubber Innovation. In addition, Thai Government has launched ‘20-Year Rubber Strategic Plan (2017-2036) to solve structural problems and lay the foundation of Thai rubber industry for sustainable growth in the future, with the vision of “Quality rubber-producing country, stable income for farmers”. Among Thai government’s measures to help the rubber sector are  1) credit support for rubber product manufacturers at the additional rate of 15,000 million baht,  2) credit support for farmer group for rubber processing at the amount of 5,000 million baht,   3) credit support for farmers for rubber accumulation at the amount of 10,000 million baht,  4) credit support for dry rubber processors to compensate interest rate at less than 3%/ year,  5) promotion of rubber consumption in government agencies, 6) production control during January – March 2017, and 7) establishment of Rubber Price Stabilizing Fund.

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 growers as well as the three largest NR producers, namely Thailand, Indonesia, Malaysia and other rubber producing countries in the ASEAN, especially Vietnam 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 2018, 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.