Economics

Rubber production in Malaysia is the world's 3rd-largest grower and exporter. The main reason is the natural rubber is the good resources to produce high quality rubber glove and this kind of rubber is generally planted in Malaysia, so the supply of rubber glove increase. Malaysia export earnings from rubber gloves last year amounted to RM9.89 billion, an increase of 10.9 per cent, compared to RM8.92 billion in 2010.

In recent years, steady economic development in natural rubber producing countries has and will influence the sustainability of natural rubber. While other commodities may be in structural surplus because demand may be declining on a per capita basis, and hence prices may be expected to continue to fall further, there is one factor which may cause NATURAL RUBBER shortages and prices to increase in the longer term. The content of natural rubber is technically considered as an intermediate good, which is complementarily used to produce a variety of final consumer goods such as medical gloves, condoms, general rubber goods (GRG), and tires. Natural rubber is unique because two of the three major producing countries, Thailand and Malaysia – possibly to be followed by Indonesia – are among the world’s fastest growing economies and are likely to be the next generation of Newly Industrialized Countries (NICs).

On the demand side, the saturation effects on rubber consumption in developed countries are still expected, but it is likely that consumption will pick up elsewhere, particularly in the Asia/Pacific region, and this will be more than enough to compensate for any decline in demand in the developed countries.   There will be plenty of room for increasing rubber consumption in the Asia/Pacific region, considering its current low rubber consumption per capita in relation to that achieved in the developed world.  In addition, this region has the world’s highest economic growth rate.  The final effect is that there will continue to be growth in world...