The global economy tends to slow down due to the effects of high inflation and interest rates. There are also strengthening of the US Dollar issues and geopolitical conflicts (Geopolitical Tension). For example, the war between Israel and Palestine may expand, and the Russian-Ukrainian war may intensify. Furthermore, the US-China economic polarization (Decoupling), in which the US and its allies reduce their reliance on trade with China and rely more on its group. Moreover, China's economy is slowing down due to structural problems. As a result, it may affect the global supply chain and Thai product exports. Besides, drought problems may be more severe than expected, resulting in a severe slowdown in agricultural production. The World Trade Organization (WTO) has estimated that the world real GDP growth rate will be 2.6% in 2023 and 2.5% in 2024. As for Thailand's economy in 2024, the export is expected to recover from the trend of global trade expansion and supply chain issues easing.
The rubber situation in 2024 is expected to slow down due to factors related to the global economy and the Chinese economy, which tend to grow at a slower rate, pressuring rubber prices to decline. The Association of Natural Rubber Producing Countries (ANRPC) projects the world's natural rubber production in 2023 at 15.15 million tons (up 3.5% from 2022), with Thailand being the world's largest NR producer, followed by Indonesia, Cote d'Ivoire, Vietnam, and India, respectively. As for the world's natural rubber demand, it is 15.44 million tons (down 0.5% from 2022), with China consuming the most natural rubber worldwide, followed by Thailand, India, EU-27& UK, and Indonesia, respectively. Thailand has faced the risk of more frequent and severe climate change. Furthermore, Thai entrepreneurs have faced the challenge of adapting to more strict climate change regulations around the world, including the Carbon Border Adjustment Mechanism (CBAM) and the EU Regulation on Deforestation-Free Products, which will come into effect in early 2025, covering 7 product groups: cocoa, coffee, soybeans, rubber, oil palm, cattle, and wood.
In conclusion, the Thai Rubber Association (TRA) strongly believes in long-lasting relationships and cooperations with the concerned sectors, i.e., government agencies, the private sector, rubber farmers, as well as the three largest natural rubber producers, namely Thailand, Indonesia, Malaysia, and other rubber-producing countries in ASEAN, to provide strategic direction and solutions to falling prices in the short-term and long-term and prepare to deal with various trade regulations for the sustainability of natural rubber.
On the occasion of the New Year 2024, I extend to you and your family our warmest greetings and wish you a happy New Year, great success in your career, happiness in your family, and perfect health and lasting prosperity.
Mr. Chaiyos Sincharoenkul
President
The Thai Rubber Association
