Problem Statement Competitiveness Analysis and Factors Affecting Trade Flow of Natural Rubber in International Market
5 Figure 3 shows some of the natural rubber producing countries in the
world, with the majority of production being located on the Asian continent, especially in Southeast Asia. Currently, Thailand is the world’s largest producer
of natural rubber producing 3.39 million tonnes in 2011. Indonesia is the second largest producer contributing around 27 of the world’s total natural rubber
production. Malaysia produced 0.99 million tonnes and occupies the third rank in terms of production. India is the fourth largest producer of natural rubber in the
world. In 2011, India produced 0.89 million tonnes of natural rubber, up from 0.85 million tonnes in the previous year. India contributes roughly 8 of the
world’s natural rubber production. Other major producers include Vietnam and China, each contributing 7 to the world production.
Meanwhile, in terms of consumption, China, the United States and India are the countries with the largest natural rubber consumption rate Figure 4. Overall,
the increased consumption of natural rubber in Asia is due to the economic growth in this region which gives rise to the new natural rubber-based industries, for
instance China and India. IRSG data showed that Chinas natural rubber consumption constituted 33 of the world’s total consumption in 2011, at 2.60
million tonnes. The USA surpassed India, as the second largest consumer of rubber at 1,029 thousand tonnes, followed by India at 958 thousand tones and
Japan at 765 tonnes. Other major consuming countries include Malaysia, Indonesia and Thailand, which accounted for 26 of the world consumption of
natural rubber.
Figure 3 Natural Rubber Production 000 tonnes in 2011 Source: IRSG, 2011
Thailand, Indonesia and Malaysia differ in their individual export destinations. However, according to the IRSG data, these three producing
countries all exported to ten primary importing countries. The primary importing countries are the USA, Japan, China, Singapore, Korea, Germany, Canada, India,
Brazil and Belgium. As mentioned above, the competition between the main exporting countries is relatively high. Therefore, it is necessary for Thailand,
Thailand 31
3394
Indonesia 27
2982 Malaysia
9 996
India 8
890 Vietnam
7 812
China 7
707 Others
11 1193
6 Indonesia and Malaysia to individually focus on improving the quantity and
quality of the product in order to remain competitive in the international rubber trade.
Figure 4 Consumption of Natural Rubber 000 tonnes in 2011 Source: IRSG, 2012
Based on this background information, some questions are raised relating to the trade flow and the competitiveness of the natural rubber sector in the
international market. The research questions of the present study are: 1. What is the level of competitiveness of the three major exporters in the
international market? Furthermore, how is this competitiveness measured? 2. What factors are affecting the trade flows of natural rubber in the
international market?