Rubber farmers, entrepreneurs and exporters are being advised to swiftly adapt to various challenges, including geopolitical conflicts and environmental measures that may impact agricultural trade, as well as European Union (EU) laws regarding products and deforestation.
Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office, said Thailand is the world's leading rubber producer, with natural rubber production reaching 4.8 million tonnes last year, accounting for 33% of global output. Thailand ranks second in rubber exports and products, behind China.
Mr Poonpong said rubber exports face some obstacles, including political polarisation and an increase in self-reliance policies adopted by several countries.
The US has made significant progress in developing natural rubber from alternative plants, such as guayule and dandelion.
Guayule is protein-free, making it suitable for the production of medical gloves and rubber bags. It can be grown in arid areas.
Hot water is used as a solvent for the latex extraction of dandelions, making it environmentally friendly. If these alternative natural rubber sources can effectively replace rubber and prove cost-effective, they may impact Thailand's future shipments, Mr Poonpong said.
Moreover, there is an environmental aspect that emphasises sustainable rubber production, which is becoming a significant global trend.
Producers are required to take social and environmental responsibility, reduce greenhouse gas emissions, conserve natural resources, and ensure the well-being of workers and communities.
According to Mr Poonpong, sustainable rubber production has gained increasing importance due to consumer demand for environmentally friendly products. For example, major automotive tyre manufacturers have policies to purchase rubber latex from certified rubber plantations that demonstrate sustainable management.
These certifications must be internationally recognised, such as the Forest Stewardship Council (FSC), which guarantees that wood and products bearing the FSC label come from forests managed in accordance with sustainable principles, including sustainable reforestation practices. Another organisation is the Programme for the Endorsement of Forest Certification (PEFC), which acts as the network, providing assessment and acceptance of national forest certification systems.
Thailand has also established national standards for sustainable forest management and a chain of custody standards for forest-based products equivalent to the PEFC standards.
Moreover, starting yesterday, the EU's Deforestation-Free Products Regulations (EUDR) came into effect. These regulations cover rubber products and other agricultural commodities including palm oil, beef, soybeans, coffee, cocoa, wood, and products derived from these commodities.
There will be a transition period of 18 months until Dec 30, 2024, for businesses to comply with the EUDR. The EU will conduct assessments of trading partner countries, categorising them into three levels: high risk, standard and low risk.
This will affect the intensity of product inspections. Initially, all countries will be classified as standard risk, and then by Dec 30, 2024, the EU will announce the list of high-risk and low-risk countries.
In 2022, global exports of rubber and rubber products were valued at US$218 billion. The top five exporting nations were China, with exports valued at $31.5 billion; Thailand at $18.8 billion; Germany at $17.5 billion; the US at $14.7 billion; and Japan at $10.7 billion.