March average RSS3 price announced by Central Rubber Market in Songkhla stood at 42.58 Baht/kg, down 2.67% from the previous month due to the following factors.

In March, Thailand’s rubber prices had slightly dropped in line with future markets. The world’s crude oil demand dropped, resulting in the slump crude oil price. Besides, the financial market and stock market are volatile. These are the impact of lockdown measures rolled out by many countries around the world to prevent COVID-19 pandemic. Even Malaysia, Thailand’s trading partner, also rolled out the lockdown measure. As a result, Both Thailand and Malaysia are affected, especially import and export rubber, other commodities, etc.

On March 16, 2020, Malaysia’s Prime Minister Tan Sri Muhyiddin Yassin announced the lockdown which restricting people’s movement nationwide to limit the spread of the coronavirus. The country is banning all visitors, and residents are barred from traveling overseas while places of worship, schools and business premises will be shut while some kind of government agencies and private-sector operations will be shut except for those providing essential services such as utilities, health, banking, and food supply. Malaysia's Movement Control Order has been announced on 16 March 2020. The initial period of the order taking place starting from 18 March 2020 onwards until 31 March 2020. Later, the government has decided to extend the MCO until 14 April 2020. After Malaysia announced the lockdown measure, the operation of the border checkpoint between Thailand and Malaysia has been stopped which greatly affected both countries.  The Thai Rubber Association had been informed about the problem of our members. So TRA has coordinated with government agencies, private sectors, Consulates, and related parties to resume the operation of the border checkpoint of both countries. However, the solutions were considered to strictly comply with the mandated health screening requirements (only for goods and drivers). Resuming the operation of the border checkpoint will reduce the effects on farmers, industry sector, supply chains, and economy.

Like other business sectors and other industries, the rubber industry was affected by the COVID-19 pandemic because some kind of commodities is perishable goods or they already have futures trading. Besides, the rubber industry was also affected by the drought. However, the Rubber Authority of Thailand (RAOT) announced the contact channel for helping smallholders, Famer institute, entrepreneurs, and other people who are suffered from rubber problems. The issues are separated into 3 issues, including 1. Income problem; 2. The regulations and coordinate with RAOT; and 3. The issues that affected rubber industries and supply chain. 

In 2020, Thailand’s economy tends to slow down than the previous year. Besides, Thailand’s inflation rate tends to be negative because of the COVID-19 outbreak, which will affect businesses as well as related employments. Moreover, Thailand’s tourism tends to drop and it needs much time to get back on the regular level. On 25 March 2020, the Monetary Policy Committee announced the outcome as the committee voted 4 to 2 to maintain the policy rate at 0.75 percent. Two members voted to cut the policy rate by 0.25 percentage. In this situation, the Committee supported the government’s implemented measures to alleviate adverse impacts especially on the affected groups and including addressing liquidity strains and accelerating debt restructuring for borrowers, especially households and SMEs, which must be urgently implemented to have meaningful impacts.

The Institute for Supply Management (ISM) informed that the manufacturing sector’s Purchasing Managers’ Index (PMI) of the US down to 49.1 in March from 50.1 in February. Meanwhile, Thailand’s PMI dropped to 46.7 in March from 49.5 in February. 

The U.S. Energy Information Administration (EIA) has announced the crude oil volume in stock on 27 March 2020, up 13.8 million barrels from the previous week, which is the highest increase since 2016. This is because skimming refineries cut the production capacity as low demand. For the oil sector, crude oil prices were pressured after the number of COVID-19 infected patients has greatly risen. From the beginning of the year 2020, crude oil prices dropped more than 60% which the most and fastest unprecedented in history due to the following factors. The factors include both supply and demand. Moreover, Saudi Arabia announced to ramp up its oil production to 12.3 million barrels per day in April after the oil production cut agreement ends. Besides, the increased oil production of Saudi Arabia is an important strategy in starting the oil price war with Russia after Russia did not agree to the OPEC and allies agreement which is to cut oil production volume 1.5 million barrels per day until the end of the year 2020.

In February 2020, Thailand exported 452,082.35 tons of natural rubber (including compound rubber), up 3.55% from the previous month, and up 1.89% YoY, generating export income of 18.9 billion baht, up 7.84% from the previous month, up 6.77% YoY. 

In the tyre sector, in February 2020, Thailand exported 11.47 million units of all tyres, up 11.3% YoY, with an export value of 14.6 billion baht, up 11.28% YoY.