Rubber was first found by the Aztecs in Mexico, Incas in Peru and by tribes in the Amazon basin, being initially used for balls in ritualistic games, figurines for worship and as incense. Rubber was ‘discovered’ by Christopher Columbus, taken back to Europe and, by the 18^th century, used in the production of consumer products including tarpaulins, diver suits and water bottles. The demand for rubber from wild trees quickly outstripped supply, so the obvious step was to manage and control the stock of rubber trees.

Around 1840, rubber tree seeds were gathered in the Amazon Basin, sent to England for germination and redistributed to South and Southeast Asia starting in Ceylon (present-day Sri Lanka), and onto the Malayan Peninsula. Rubber plantations were slow to establish themselves, although they operated in Indonesia by 1861, and Malaysia by 1860. A worldwide ‘rubber boom’ started with the invention of the pneumatic tire in 1888, followed by the introduction of motorized vehicles at the turn of the century. Investments came pouring into Southeast Asian plantations by 1905, led by tire makers Goodyear, Dunlop and Michelin. The hub of natural rubber production had rapidly shifted from the Americas to Southeast Asia, and remains in the region today, largely in Thailand, Malaysia and Indonesia.

Throughout the last decade, Thailand has become the largest natural rubber producer and exporter in the world. The south, starting in Chumpon Province (about 500 km south of Bangkok) and continuing to the border with Malaysia, is the heart of rubber production in Thailand, with smaller crops grown in the Eastern and Northeastern regions. Thailand produced 2.065 millions tons of rubber in 1998, exporting 1.84 million tons of the yield earning US$ 1.46 billion. The leading export markets for Thai rubber are Japan, the USA, China, Malaysia and South Korea. Rubber plantations in Thailand are dominated by the small-holding sector, characterized as production cultivated from four hectares or less.

The natural rubber industry in Thailand is currently facing difficulties because the market price for rubber has been in decline. Export volumes have been increasing, but revenue earned has decreased because of the devalued baht and low rubber price. Thailand and Malaysia have recently withdrawn from the International Natural Rubber Organization (INRO), dissatisfied with the body’s ability to stabilize the price of rubber on the world market. The current trend in natural rubber finds a reduced demand for smoked rubber sheets, of which Thailand is the world’s leading producer, with preferences shifting to rubber blocks and concentrated latex as these forms offer buyers a higher quality standardized product. Competition is increasing in the smoked rubber sheet market from countries with lower production costs like India and Vietnam, while Malaysia and Indonesia have cornered large shares of the higher quality market for rubber blocks and concentrate.

Thailand has been successful in attracting and promoting domestic rubber manufacturing companies, but must focus its efforts for further development of these value-adding industries as 90 percent of natural rubber production is exported. Tire and tube manufacturers are the largest users of natural rubber in the country, accounting for 47 percent of domestic rubber consumption. There are three well-known large tire companies, Goodyear, Bridgestone and Michelin as well as 16 other companies producing tires for cars, trucks, buses and aircraft operating in Thailand. Other large manufacturing industries make rubber gloves, condoms, balloons, auto parts, cushions and elastic bands.

The future for Thailand’s natural rubber industry is unclear at the moment. Prices are likely to remain depressed, even with Thai and Malaysian efforts to manipulate prices upwards. Their pact is far from a cartel on natural rubber, as Indonesia has not joined their efforts, while synthetic rubber can replace natural rubber, acting as a viable substitute if prices dramatically increase. Plans are underway to further expand the rubber industry into the northeast of Thailand. Small farmers are being offered incentives and guidance to help them improve the quality of the rubber, and shift towards production of rubber blocks and concentrate. Further focus will be placed on attracting and expanding rubber-based industries including further production of rubber gloves, condoms and tires that capitalize on Thailand’s plentiful, steady supply.

Thailand is under pressure to maintain rubber as an important part of its economy and needs to upgrade the production technology to meet market trends, and further develop supporting industries to add value and maximize the resource’s benefit to the country.

	Thailand’s Rubber Exports
	World Rubber Production

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