The average price of RSS 3 at Songkhla Central Rubber Market in April 2020 was 39.72 Baht/kg, down 2.67% from the previous month due to the following factors.

In April, Thailand’s rubber prices were volatile and had slightly changed because of the COVID-19 pandemic which severely affected many sectors; Tourism, Industries, Import, Export, and Consumption. Furthermore, the pandemic also caused volatility in the world financial market. The global economy is projected by The International Monetary Fund (IMF) to slow down by –3 percent in 2020. Meanwhile, Thailand’s economy in 2020 might shrink by 5.3%. If the pandemic continues severe and prolonged, the world’s economy may be a severe recession. However, governments and central banks around the world expedite to roll out the assistance measures to lessen the COVID-19 impacts. In addition, from the recent report, China’s first-quarter GDP growth rate of 2020 was -6.8% which was the lowest GDP growth rate during these 20 years.

For the rubber industry, the COVID-19 pandemic affected supply chains (from upstream to downstream). After many countries such as Malaysia had implemented movement control order measure, it affected both people and cargoes cannot move in and out the borders. For Malaysia's case, the Thai Rubber Association had coordinated with related parties to accommodate and resume the shipment operation under strict compliance with the mandated health screening requirements. For Songkhla province, both the Sadao border and Padang Besar border should be opened because if open only one border, it will cause traffic congestion. Moreover, it also has other factors, including the process of permission papers and the strict time followed by the Emergency Decree on Public Administration in Emergency Situations, B.E. 2005. On April 22-29, 2020, the Sadao border was closed for cleaning after found the immigration officer infected COVID-19. Furthermore, the rubber industry was affected by the drought. However, the Ministry of Agriculture and Cooperatives under Thai government has rolled out assistance measures to help farmers who were affected by COVID-19 impacts with the scope of helping and lessening farmers and entrepreneurs. The government will handout cash 5,000 baht/month for 3 months form May-July 2020. The target is the farmers (not more than 10 million farmers). It consists of 2 types of targets: 1) the farmers who have been registered with Department of Agriculture Extension, Department of Livestock Development and Department of Fisheries (8.43 million farmers); 2) the farmers who are waiting for the approval of the registration (not more than 1.57 million farmers). The amount of subsidies is approximately 150,000 million baht. About 10 million farmers who were affected by COVID-19 are on the registered lists (must not be on the lists of the government’s No One Left Behind campaign). The farmers will get 15,000 baht/person. The measure aims to help farmers’ livings expense during the pandemic. In addition, the government needs to expedite in solving further economic liquidity problems and prevent social problems that might be occurred after the pandemic.

In terms of Thailand’s economy in 2020, it tends to shrink more than the last year. The inflation rate tends to be negative because of COVID-19 impacts. Additionally, it will affect businesses and related employments, especially tourism, which tends to be very slow down, and it needs time to get back to normal. For Thailand’s international trade, in March 2020, Thailand’s export income value 693,352.56 million baht, up 4.21% yoy, and up 11.42% compared with February 2020. From January to March 2020, Thailand’s export income value 1,903,156.52 million baht, down 2.98% yoy. For the next Monetary Policy Committee meeting, it will be held on May 20, 2020.

The Institute for Supply Management (ISM) informed that the manufacturing sector’s Purchasing Managers’ Index (PMI) of the US down to 36.1 in April from 49.1 in March. Meanwhile, Thailand’s PMI dropped to 36.8 in April from 46.7 in March.

The U.S. Energy Information Administration (EIA) has announced the crude oil inventories increased by 9 million barrels for the week ending April 24, which was lower than the expectation as 10.6 million barrels. In terms of crude oil prices, it tends to slow at a low level because the markets worry about the crude oil volume in stock of the U.S., which continually gets higher. Conversely, the world oil consumption demand decreased because of COVID-19 impacts. However, OPEC+ under Saudi Arabia and Russia has announced to cut the oil production capacity followed the agreement to build the oil price stability and lessen the effects of COVID-19 pandemic. They will start to cut the production in May 2020 followed the agreements in the emergency meeting on April 12, 2020. Moreover, they prepare to hold the next emergency meeting in May. Furthermore, the market was positively affected after President Donald Trump announced plans to loosen lockdown measures in many cities to start rejuvenation of the U.S. economy again. Because after the lockdown measure to prevent the COVID-19 spread, about 20 million people were lost their jobs. If the U.S. is back to the normal situation, it is expected that the oil demand will rise.

In March 2020, Thailand exported 372,264.17 tons of natural rubber (including compound rubber), down 17.66% from the previous month and down 14.67% yoy, generating export income of 16.1 billion baht, down 14.6% from the previous month, down 9.76% yoy. 

In the tyre sector, in February 2020, Thailand exported 10.64 million units of all tyres, down 6.1% yoy, with an export value of 13.9 billion baht, down 5.11% YoY. The amount of Thailand's car production in March 2020 is 146,812 units, down 26.16% yoy. For the first 3 months of 2020, Thai produced 453,682 of cars, down 19.2%yoy.