Highlights
 

• February marks 18.7% NR yield growth MoM, 21.3% growth YoY
   
• Exports of NR too go up by an impressive 23.7% MoM
   
• Malaysian gloves set to upend China's competition in US market
   

Malaysia bettered its rubber production in the second month of this year after taking a severe beating in January due to rains. The fresh impetus has bolstered the spirits of the administration and the Malaysian Rubber Board, who are engaged in a concerted effort to boost rubber production in the country. They are harping on a long-term plan for a quantum jump in rubber production by reviving idle plantations in over 420,000 hectares held by smallholders in the country.

Chief Statistician of Malaysia, Mohd Uzir Mahidin, said Natural Rubber (NR) production increased by 18.7% in February 2025 (36,005 tons) compared to January 2025 (30,342 tons). Year-on-year comparison showed that the production of NR increased by 21.3% (February 2024: 29,691 tons). Production of NR in February 2025 for Malaysia was mainly contributed by the smallholder sector (87.8%) as compared to the estate sector (12.2%).

Thailand, Ivory Coast dominate imports

Imports of NR to Malaysia in February 2025 were 107,925 tons compared to 134,480 tons in February 2024, down 19.7%. However, month-on-month comparison showed an increase of 7.2%. The main types of imported natural rubber were Scrap (47,782 tons) and Standard Rubber (24,081 tons). Natural rubber was mainly imported from Thailand, amounting to 30,827 tons, followed by Ivory Coast at 27,156 tons, Myanmar at 12,582 tons, Philippines at 11,868 tons, and Ghana at 8923 tons.

Malaysian NR exports amounted to 54,847 tons in February 2025, up 23.7% against January 2025 (44,338 tons). China remained the main destination for NR exports, accounting for 52.4% of total exports in February 2025, followed by Germany (9.0%), the United Arab Emirates (8.4%), the United States of America (4.8%), and Brazil (3.0%).

The export performance of NR products was centred around gloves, tires, tubes, and rubber threads. Gloves were the main exports at a value of RM1.2 billion (US$272 million) in February 2025, down 11.8% compared to January 2025 (RM1.4 billion).
 

Source: DOSM and Helixtap Analytics

Prices rise, market witnesses mixed trend

Domestic consumption of natural rubber in February 2025 was 21,053 tons, down 13.2% from 24,246 tons in February 2024. Month-on-month comparison showed a decrease of 4% from 21,933 tons in January 2025. The rubber glove industry was the mainstay for the use of natural rubber at 11,771 tons (59.9%), followed by rubber thread (13.8%), tires and tubes (9.8%), and others (20.5%).

Total Malaysian stocks of NR in February 2025 increased by 16.2% to 206,762 tons compared to 177,935 tons in January 2025. Rubber processors factory contributed 88.2% of the stocks followed by rubber consumers factory (11.7%) and the rubber estates (0.1%).

Analysis of the average monthly price showed that Concentrated Latex recorded an increase of 2.2% (February 2025: 693.13 sen per kg; January 2025: 678.42 sen per kg) while Scrap increased by 3.7% (February 2025: 770.44 sen per kg; January 2025: 743.27 sen per kg). The prices for all Standard Malaysian Rubber (S.M.R) increased between 2.1% and 3.3%. 

The Malaysia Rubber Board’s monthly rubber digest said the Kuala Lumpur market showed a mixed trend in February in tandem with the regional rubber futures market due to the uncertainties surrounding the US trade tariffs, the US monetary policy direction, and the US-China trade relations. Losses in crude oil prices and fluctuations in the ringgit against the US dollar also dragged down the market sentiment.

Nevertheless, the market sentiment was supported by persistent concerns over tight NR supply due to weather conditions in major NR-producing countries and Chinese stimulus measures amid a brighter NR demand outlook.

Malaysia’s rubber product exports to US at US$1.79 billion in 2024

Meanwhile, Malaysia’s highly performing rubber glove sector is expected to benefit from the China-US trade war that has been triggered with Trump imposing sky-high tariffs on China. The measure is expected to affect exports of Chinese gloves to the US badly, and Malaysia would benefit since Chinese gloves have been giving Malaysian gloves a run for their money in exports to the US.

Malaysian Rubber Council estimates reveal that Malaysia’s rubber product exports to the US hit RM7.923 billion (US$1.79 billion) in 2024, the bulk of which are gloves. One-third of Malaysia’s rubber product exports currently go to the US, while gloves constitute two-thirds of Malaysia’s global rubber products exports. In 2024, 41% of Malaysia’s gloves went to the US, making it the largest destination, while Europe trailed behind at 28%.

Top Glove, the top global glove producer hailing from Malaysia, reportedly said it is expecting export volumes to the US to go up in the wake of better tariff rates.

“As the US accounts for about 25% of Top Glove’s global export sales, we believe this will generally be positive for the company. However, as these are early developments, we will continue to monitor the situation and assess the full impact of the tariffs in the coming months,” the company was quoted as saying in local media recently.

However, there are pressures on glove exporters from US customers to give discounts to keep profit levels above the tariff burden. Glove exporters are gearing up for softer demand and lower purchase volumes in the US as well.

Malaysian Plantation Minister optimistic

Malaysian Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said Malaysia is better positioned in the tariff hike by the US, especially in the case of rubber products.

“Our rubber products are likely to be more competitive than China’s in the US market. However, China has a much larger production capacity. They might focus on other markets outside the US and offer very competitive prices there which might impact us,” he said in the second week of April this year.

He added that with the new 24% tariff in place, Malaysia must be ready to adapt and engage in negotiations with the US. Malaysia currently faces the lowest US reciprocal tariff rate of 24% among key glove-producing nations of China (up to 245%), Vietnam (46%), Thailand (36%), Indonesia (32%), Cambodia (49%) and India (26%), though the tariff is kept in abeyance for three months for all except China.

The Malaysian Rubber Glove Manufacturers Association (MARGMA) president, Oon Kim Hung, felt that tariffs were fundamentally negative. “There will undoubtedly be an impact on exports, including gloves. As long as there is a degree of certainty about what lies ahead, we will be able to overcome it. The impacts of this tariff are still unfolding, and we are closely monitoring the effects on our industry,” he said.

A key development witnessed in recent times was the frontloading from Chinese players before the new tariffs came into force, which was lapped up by US buyers also. This has reportedly affected leading Malaysian glove firms like Hartalega, whose sales volume was set to fall by 15-20% in the quarter ended March 31, and it expects a revival in the ongoing quarter.

It is being pointed out by experts that, with gloves being an oversupplied market post-pandemic, the influx of gloves from ASEAN countries to the US will eventually erode any pricing advantage for firms.