Global natural rubber output in 2025 is forecast to remain below consumption for the fifth consecutive year, as low prices discourage replanting and expansion in key producing countries.
Article:
(CSVN) – The global natural rubber industry is expected to face another year of supply shortages in 2025, marking the fifth straight year that production will fail to keep pace with consumption.
Industry analysts attribute the imbalance to persistently low rubber prices, which have discouraged expansion and replanting in major producing nations such as Indonesia and Vietnam.
Demand Rising Faster Than Supply
Table of Contents
According to Lekshmi Nair, Senior Economist at the Association of Natural Rubber Producing Countries (ANRPC), demand in major consuming markets — China, India, and Thailand — continues to rise steadily. However, output growth remains sluggish due to low profit margins and only a slight recovery in prices since 2024.
This ongoing production deficit could push global rubber prices higher, following a 13-year peak reached in late 2024. While this benefits smallholders, it increases input costs for rubber-dependent manufacturers, particularly tire producers.
The ANRPC projects global natural rubber production to rise by only 0.3% to 14.9 million tons in 2025, while consumption is expected to grow 1.8% to 15.6 million tons, widening the shortfall.
Years of Stagnant Prices Have Discouraged Investment
After more than a decade in which crops like oil palm, coffee, and cocoa delivered better returns, rubber prices only began to surge in late 2024. Erratic weather across Asia further constrained supply, amplifying the uptrend.
Ms. Nair noted that the current shortage stems from seven to eight years of weak prices, which led to declining replanting activity and farmers switching to more profitable crops.
Production Trends Across Major Producers
-
Indonesia, the world’s second-largest rubber producer, is projected to see output fall 9.8% to 2.04 million tonsin 2025.
-
Vietnam, ranked third, may also record a 1.3% decline to 1.28 million tons.
-
Thailand, the global leader, is expected to increase production by only 1.2%, following a 0.4% drop in 2024.
Meanwhile, West African producers such as Côte d’Ivoire have achieved moderate production growth, but not enough to offset declines in Southeast Asia, where the majority of global rubber originates.
Demand Outlook: Asia Leads the Way
According to ANRPC estimates, China and India — the world’s two largest natural rubber consumers — are forecast to increase demand by 2.5% and 3.4%, respectively, in 2025.
With tire production and automotive manufacturing both expanding, the global rubber market is expected to remain tight throughout the year, keeping prices elevated and supply constrained.