Thailand Monthly Rubber Report – January – February 2025
The global economy is still facing uncertainties over trade policies, which are putting pressure on the economies of the United States, Europe, China, and the world as a whole. The trade conflict between the United States and China remains at risk of escalating in the next phase, including uncertainty over President Donald Trump's trade policies towards other countries, such as Thailand. These uncertainties present significant challenges to the direction and growth prospects of Thailand's economy this year. China's overall growth continues to rely on stimulus measures, while spending during the Chinese New Year festival is likely to help stimulate the economy to some extent. As part of China's economic stimulus program, consumers are encouraged to exchange old products for new ones, which led to a consumption increase of more than 1%. China's efforts to upgrade consumption and expand its product exchange program, while accelerating the integration of domestic and international trade development, are set to expand further in 2025. The Manufacturing Purchasing Manager's Index (PMI) in January rose to 51.2 from 49.4 in the previous month. Meanwhile, the US Consumer Confidence Index (CCI) dropped from 104.7 in December 2024 to 104.1 in January 2025.
Thailand's economy is projected to expand by 2.4-2.9% in 2025, with the tourism sector continuing to serve as the primary driver of growth. In January 2025, the headline inflation rate increased by 1.32% year-on-year (YoY), primarily due to a rise in fuel prices, which was influenced by a low base price from the previous year, alongside increases in food and beverage prices. Thailand’s economy remains under pressure from external factors, including the ongoing trade conflict between the United States and China, as well as the uncertainty surrounding the policies of "Trump 2.0". Regarding core inflation (Core CPI), which excludes fresh food and energy, it grew by 0.83% YoY. However, significant attention must be given to restructuring Thailand's economy, particularly by enhancing the competitiveness of domestic entrepreneurs, aligning with global trends, reducing business-related obstacles, and systematically addressing the issue of household debt.
The overall Consumer Confidence Index for January 2025 stood at 51.5, a slight decrease from 51.6 in the previous month. The current Consumer Confidence Index has also declined to 43.8 from 43.9. Factors contributing to sustained consumer confidence include the government's ongoing economic stimulus measures, such as tax-deductible shopping initiatives (Easy E-Receipt 2.0) and reductions in electricity bills. Additionally, various activities have contributed to an increase in tourism, which has helped stimulate consumer spending and bolster income for the service sector.
In terms of Thailand’s international trade in January 2025, Thailand’s export income value was 862,367 million baht, up 13.55% YoY and up 2.06% in the previous month. Thailand's import value in January 2025 amounted to 938,112.01 million baht, reflecting an increase of 7.88% YoY and an increase of 9.61% compared to the previous month. The trade balance for January 2025 recorded a deficit of 75,745.45 million baht (Trade Policy and Strategy Office, Ministry of Commerce, 2025).
The U.S. Energy Information Administration (EIA) reported a rise in U.S. crude oil inventories by 4.07 million barrels, reaching a total of 427.9 million barrels for the week ending February 7, 2025. Crude oil prices are still expected to rise, as the market remains concerned about reduced supply following an incident in which Ukraine launched drones to attack the Caspian Pipeline Consortium (CPC) pipeline in Russia. This pipeline transports crude oil from Kazakhstan to global markets. Additionally, there are concerns about the potential impact of import tariffs on Canada, Mexico, and China, which could escalate into an international trade war. These concerns were further exacerbated by the Conference Board's (CB) report indicating a decline in the U.S. Consumer Confidence Index to 104.1 in January 2025, down from 109.5 in December 2024. As of February 19, 2025, the prices for West Texas Intermediate and Brent crude oil were reported at $72.25 and $76.04 per barrel, respectively.
In January 2025, the rubber price at the Central Rubber Market in Songkhla rose in alignment with the price trends in the foreign futures market, as investors expressed a positive outlook on the Chinese economy and oil demand. The average rubber price in the Singapore market (SICOM-STR20) was 193.26 cents per kilogram. In January 2025, Thailand exported 402,981 tons of natural rubber, with a total export value of 27.6 billion baht. Regarding tires, Thailand exported 12.4 million tires in January 2025, generating an export value of 20.8 billion baht.
The Federation of Thai Industries (FTI) reported that a total of 104,878 cars were produced in December 2024, reflecting a 17.37% YoY decrease. Of this total, 67,203 cars were produced for export, accounting for 64.08% of overall production, a decline of 9.47% YoY. Domestic production in December 2024 amounted to 37,675 cars, representing 35.92% of total production, which marked a 28.50% YoY decrease. Regarding domestic car sales, 54,016 vehicles were sold in December 2024, reflecting an increase of 27.67% compared to November 2024, but a decline of 20.94% YoY. From January to December 2024, total car production reached 1,468,997 vehicles, reflecting a 19.95% YoY decrease.
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