Revealed Comparative Advantage RCA of Natural Rubber Major Exporter
34 producer and exporter in the world, producing around 2-3 million tons per year, or
approximately 30 percent of global production. Malaysia is the third largest producer and exporter with approximately 1 million tons per year, accounting for
around 10 percent of the world’s total production.
The estimation results of the RCA analysis for natural rubber, in the period from 2003 through 2013 shows that the natural rubber production in these three
countries have a comparative advantage in the international market as indicated by an RCA value greater than one Table 8. The average value of the RCA for
Thailand, Indonesia and Malaysia respectively, are 29.66, 29.36 and 9.15. If the RCA value is greater than one, it indicates that the share of the natural rubber
commodity, out of all commodity categories, that is exported from the three main exporter countries is greater than the share of the natural rubber commodity
worldwide. From the three main exporter countries, Thailand has the highest RCA, followed by Indonesia and Malaysia.
Thai natural rubber has the highest average of RCA in comparison to the other top exporting countries, although in some periods Indonesia could surpass
Thailand’s RCA. The high RCA in Thailand is primarily due to the high proportion of exports coming from natural rubber in relation to all exported
commodities. Thai natural rubber exports have reached accounted for an average of 4 percent of all exports from 2003 to 2013, while reaching as high as 6 percent
in 2011. This indicates that natural rubber is one of the most important commodities in Thailand, where rubber plantations occupy roughly 3 million
hectares of land, mostly in the southern region where climatic conditions further enable enables high yields about 76 tons of rubber per hectare. Furthermore, the
Thai government has made strategic plans in an effort to boost the number of rubber plantations in the northern, eastern and central regions, which will ideally
raise natural rubber production by an additional 250,000 tons by 2017 TCEB, 2014.
Table 8 The Estimation Results of Revealed Comparative Advantage RCA of Natural Rubber in International Market
Year Thailand
Indonesia Malaysia
2003
39.21 27.56
10.14
2004 36.83
31.63 11.24
2005
34.55 31.06
11.11
2006 32.64
33.66 10.98
2007
30.40 35.34
10.05
2008 30.11
34.84 9.64
2009
29.07 28.65
8.29
2010 24.16
27.76 8.61
2011
22.15 22.24
7.35
2012 18.16
19.73 5.33
2013
28.99 30.46
7.85
Average 29.66
29.36 9.15
Source: Author’s elaboration with data from UN COMTRADE, 2014
35 Meanwhile, the proportion of exports coming from natural rubber
production in Indonesia, in relation to all exported commodities ranged from 2-6 percent in the period between 2003 and 2013. The extent of competitiveness
between Thailand and Indonesia tend to fluctuate from year to year, which indicates a high level of competition between the two in terms of gaining market
share for natural rubber. From 2003 to 2005, Thailand’s RCA was much larger than that of Indonesia’s RCA. This is due to the average value of Thailand’s
natural rubber exports 3.3 billion US being much larger than the value of Indonesian natural rubber exports 2 billion US. Additionally, Thailands
proportion of natural rubber exports in relation to the total world exports of natural rubber was the highest, at 41 percent, while Indonesia accounted for only
25 percent. Moreover, the share of Thailand’s natural rubber export value in comparison to its overall commodity export value reached 3.5 percent, while
Indonesian rubber achieved less than 3 percent.
Conversely in the period between 2006 and 2013, the Indonesian RCA exceeds the Thai RCA in every year except for 2009. This was likely due to the
significant increase in the value of Indonesian natural rubber exports during that period. The average value of Indonesian natural rubber exports reached 6.5 billion
US, while Thailand reached 7.5 billion US annually during that period. Although Thailand’s export value is higher than Indonesia’s, the difference in
their value of exports of natural rubber is declining from year to year. The average difference in the period from 2006 to 2013 amounted to 0.9 billion US, while the
previous period 2003-2005 reached 1.2 billion US. Additionally, the share of the Indonesian natural rubber export value to the entire Indonesian commodity
catalogue export value reached 4.4 percent, which exceeded Thailand’s which only reached 4 percent.
The highest RCA for Thailand was 39.21, a value which was achieved in 2003. The reasoning behind this elevated RCA value is the result of large natural
rubber export values into the world market, at approximately 2.7 billion US and with the proportion of Thai natural rubber exports to the total commodity export
being roughly 3.5 percent. Additionally, the proportion of the worlds natural rubber exports to total world exports for all commodities was only 0.09 percent,
which lead to high competitiveness in Thailand during that period. Indonesia achieved its highest RCA value of 35.34 in 2007. At that time, the share of
Indonesian natural rubber exports to the world’s natural rubber market reached 30.37 percent, however, the highest share was achieved in 2013, by 35.24 percent.
In 2013, Indonesian natural rubber exports were received in 70 countries, including the United States and China, which became the primary market.
Meanwhile, the highest RCA for Malaysia was 11.24 in 2004. In 2004, the share of Malaysian natural rubber exports to the world’s natural rubber export total was
the highest in Malaysian history, at 16 percent with an export value of 1.4 billion US.
As the third largest natural rubber exporter in the world, Malaysia is still competitive. However, when compared to the other two main exporting countries,
Malaysia’s competitiveness is quite low. That being said, the share of Malaysian natural rubber exports to the worlds natural rubber exports is still in the range of
13 percent. Moreover, the share of natural rubber exports from Malaysia in some destination countries is relatively low, the United States and China for example
36 import mainly from Thailand and Indonesia. Additionally, the proportion of
Malaysian natural rubber exports to total exports of all commodities from Malaysia is still very low, approximately 1-2 percent, a proportion which is
largely due to the overall decrease in natural rubber production in Malaysia.