In December, Thailand's rubber prices had slightly changed; meanwhile, there were slight positive changes in the foreign future exchange markets. Natural rubber situation was continued slowdown in line with global economic growth as the economic factors coupled with the natural rubber output and demand for natural rubber factors. For example, the widespread fungal disease problem in Indonesia rubber plantations affected 380,800 hectares. Meanwhile, Thailand and Malaysia were also affected as 52,000 and 5,000 hectares, respectively. For severely affected rubber plantations will decrease production by 70-90%. Meanwhile, the medium affected plantations area decreased by 30-50%. The International Tripartite Rubber Council (ITRC) expects that in 2020, rubber production will decrease more than 800,000 tonnes. According to the Economist Intelligence Unit (EIU), growth in global natural rubber production is projected to slow to an annual average of 1% year on year in 2020-2021 as high stocks and weak prices discourage supply. Similarly, growth in global consumption of natural rubber is forecast to slow to an annual average of just 2.6% in 2020-2021, down from an estimated growth of 4.5% in 2018 because of the declining automobile demand and the volatile crude oil prices.

Rubber Authority of Thailand (RAOT) has encouraged rubber farmers-smallholders to collaborate as farmer institutions to produce for processing rubber products and value-added rubber products. Moreover, RAOT has rolled the measure to enhance smallholders and farmer institutions by finding area and providing the distribution channels to sell rubber products under The 3rd Rubber Product Distribution Channels for Thai Farmers Scheme. It aimed to promote domestic consumption of natural rubber as well as to increase the distribution channels for natural rubber products.

For Thailand, The Monetary Policy Committee (MPC) has maintained the policy interest rate at 1.25% per year (Data as at December 18, 2019) because Thailand’s economic expansion tends to slow down than the potential level and lower than previously estimated due to the exports sector is shrinking as well as the manufacturing structural changes which affect the competitiveness of the export sector. Thai Government has rolled out the economic stimulus measures to establish economic strengths both in domestic and foreign countries. One of the most important measures is the investment in the Eastern Economic Corridor (EEC), which needs clarity as well as a continuation to generate more trade and investment opportunities. However, the prolonged US-China trade war is still the risk factor that must be focused as it can affect Thailand’s export to the US and China. Therefore, entrepreneurs need to follow the news as well as quickly adapt to different and unexpected situations.

The Institute for Supply Management (ISM) informed that the manufacturing sector’s Purchasing Managers’ Index (PMI) of the US dropped as 48.1 in November from 48.3 in October. Meanwhile, Thailand’s PMI was up to 50.1 in December from 49.3 in November. For the fourth quarter, the average PMI was 49.8. The production sector was mostly slow down. For the oil sector, OPEC+ agreed to continue in reducing crude oil production volume. However, Mr. Alexander Novak, the Minister of the Ministry of Energy of the Russian Federation, stated that OPEC+ might consider ending the reducing crude oil production volume measure in 2020 because the demand might increase, resulting in the balance of crude oil market. Furthermore, he stated that OPEC+ should concern about protecting market share. Crude oil price continually increases after the U.S. Energy Information Administration (EIA) has announced the crude oil volume in stock on 20 December 2019, down 5.5 million barrels as 441.1 million barrels because the domestic skimming refineries increased the production volume as 418,000 barrels.

In November, Thailand exported 416,121.82 tons of natural rubber (including compound rubber), up 14.07% from October and down 11.13% YoY, generating export income of 16.2 billion baht, up 11.04% from October, down 16.59% YoY. Overall, during the first 11 months of 2019, Thai NR exports (including compound rubber) reached 4,097,612.71 tons, down 12.55% YoY. The YTD export value touched 173 billion baht, down 16.15% YoY.

In the tyre sector, in November, Thailand exported 11.42 million units of all tyres, up 1.84% YoY, with an export value of 14.2 billion baht, up 0.37% YoY. Overall, during the first 11 months of 2019, Thai exports of all tyres reached 123.82 million units, up 3.01% YoY, generating export revenue of 160 billion baht, up 10.66% YoY.