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  NR SITUATION OF   October 2021 [Current Year]  
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Thailand Monthly Rubber Report – October 2021

Global trade significantly grows following the economic recovery despite facing supply disruption. Employment tends to recover slowly, and the Headline inflation rate tends to accelerate to a high level for the remainder of the year. Recently, the International Monetary Fund (IMF) revised the world GDP forecast in 2021 as of 5.9%, 0.1% lower than the former forecast in July due to the slowdown of developed country economies, which is affected by supply disruption as well as the severe COVID-19 outbreak in low-income countries. In 2022, the International Monetary Fund (IMF) remains the world’s GDP forecast at 4.9%. The world’s economic recovery is likely to be complicated due to the COVID-19 outbreak affecting around the world. Demand and supply may not be as consistent as usual. Moreover, energy and food prices are high. However, it needs to be monitoring the situation closely, including the global warming issue.

In 2021, Thailand’s economy is projected to grow 1% per year due to the impact of the new wave of the severe COVID-19 outbreak with a rapid epidemic rate. The government attempts to speed up vaccinations in at least 70% of the areas, especially in the red area (the highest control area). Meanwhile, the Fiscal Policy Office (FPO) forecasts that Thailand’s economy in 2022 will grow at a better rate of 4.0% per year due to increasing foreign tourist admissions and continuous export growth. However, it is important to continuously monitor various risk factors such as epidemic control measures, accepting foreign tourist policy, continuity of support measures from the government, and supply disruption issue, etc. The Bank of Thailand has forecasted that Thailand's economy in 2021 and 2022 tend to grow at 0.7% and 3.9%, respectively. Furthermore, the Monetary Policy Committee has decided to remain the policy interest rate at 0.5% for the year 2021 to support the economic recovery.

September’s Thailand Industrial Sentiment Index (TISI) up to 79.00 from 76.8 due to the easing of the COVID-19 outbreak situation, decreasing infected cases, and better economic activities. However, the production cost is high including high raw material price, oil price, and shipping cost. Moreover, many areas have to confront flood issues. These factors affect economic activities. Therefore, the government should expedite solving the flood issue by assessing the situation in advance and planning sustainable solutions. Furthermore, the government should expedite the issuance of economic rehabilitation and stimulus measures. Besides, the government should maintain the energy prices and oil prices at appropriate levels, etc. In terms of Thailand’s international trade in September 2021, Thailand’s export income value is 760,556.26 million baht, up 24.40% YoY and up 6.31% compared with the previous month. Meanwhile, Thailand’s import value is 750,267 million baht, up 38.35% YoY and down 1.96% compared with the previous month. In terms of trade balance in September 2021, Thailand recorded a trade balance surplus of 10,289.26 million baht (Ministry of Commerce, 2021).

The Institute for Supply Management (ISM) informed that the US Manufacturing Purchasing Manager Index (PMI) in October 2021 dropped to 58.4 from 60.7 in the previous month due to the labor and raw material shortage issues. Meanwhile, Thailand’s PMI up to 50.9 in October 2021 from 48.9 in the previous month. Thailand’s manufacturing sector recover positively due to the easing of COVID-19 outbreak measures. There is still price pressure because of high production costs despite low demand. However, overall confidence remains favorable this month, which is a positive signal to improve forward.

The US Energy Information Administration (EIA) has announced that the crude oil inventories have increased 4.3 million barrels to 430.8 million barrels for the week ending of 22 October 2021. Overall, crude oil prices increase compared with the previous month. However, crude oil continues to be supported by the energy shortage crisis, especially in China and India, which are going to use crude oil after the supply of coal and natural gas continued to be tight amid the cold weather in North Asia. On 29 October 2021, West Texas Intermediate (WTI) crude oil and Brent crude oil prices stood at 83.57 and 84.38 USD/barrel.

In October 2021, rubber prices and rubber futures market prices increase compared with the previous month. However, the export sector has slightly contracted from the previous month. The southern part of Thailand still has continuous rain, which affects rubber tapping. There are other pressure factors such as the COVID-19 outbreak, the shortage of rubber shipping containers, and high energy prices which cause raw material and shipment costs to increase. However, it is important to monitor the US and China economies and Thai baht currency fluctuation. Furthermore, the government has set the economic model for sustainable development or BCG Model as a national agenda. Dr. Chalermchai Sreeon, Minister of Agriculture and Cooperatives, has the policy to focus on climate change issues, consisting of 4 main issues as follow; 1) Raising awareness about climate change in the agricultural sector; 2) Adapting to prepare for climate change; 3) Participating of the agriculture sector in reducing the country's greenhouse gas emissions, and 4) Strengthening management capabilities. Meanwhile, the Rubber Authority of Thailand (RAOT), headed by Mr. Nakorn Tangavirapat, the Governor, has the policy to drive carbon credit management in rubber plantations projects to enhance and develop a green economy, as well as low carbon society. Moreover, it is also another channel to increase rubber farmers’ income.

In September 2021, Thailand exported 385,087.09 tons of natural rubber (including compound rubber), down 2.33% from the previous month and up 26.41% YoY, generating an export income of 20.5 billion baht, down 3.35% compared with the past month, up 69.65% YoY. In the tyre sector, in September 2021, Thailand exported 12.35 million units of all tyres, down 3.62% YoY, with an export value of 17.6 billion baht, up 11.27% YoY.

In September 2021, Thailand’s car production is 140,038 units, down 6.43% YoY, and up 34.47% compared with the previous month due to receiving the semiconductors and automotive parts from the trade partner countries that have already loosened their lockdown measures. Thailand’s car production includes production for export by 81,282 units (58.04% of all production) and domestic sales by 58,756 units (41.96% of all production). Meanwhile, Thailand's domestic car sale in September 2021 is 56,871 units, up 34.84% compared with the previous month due to the loosened lockdown measure, starting from September 1, 2021. From January to September 2021, Thailand’s car production is 1,211,946 units, up 25.93% YoY.

Disclaimer: The information contained herein is obtained from a variety of sources and the dissemination of information is for the purpose of providing information to interested parties only. The Thai Rubber Association is not responsible for any damages that may occur from the use of this information by any person.



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