Natural rubber (NR) markets have shown bearish trends since February 2022 due to the prolonged and worsening war between Russia and Ukraine. Prevailing rubber prices trended to an unremunerative and unsustainable level for producers, mainly rubber smallholders, which would have negative impacts on NR production.

Covid-19 and bearish economic growth prospects, caused by supply chain disruptions and acute inflation, have continued to cast doubt on economic recovery and NR demand. Furthermore, geopolitical tensions, especially the war between Russia and Ukraine, have posed unprecedented challenges to the global economy, leading to disruptions and crises in energy, currency, financial sectors, and the global supply chain. These could put a further drag on the already-dampened global economy in 2022 and 2023. 

The market is expected to see much lower global NR production due to a 6-month wintering period starting in December 2022 across major NR-producing countries. Wintering is forecast to begin in China (Yunnan and Hainan), followed by Vietnam, Cambodia, Thailand, Northern Sumatra, Peninsular Malaysia, Ivory Coast, and other African countries until mid-2023. A decline of about 10-15% in NR production is anticipated in these 6 months of long wintering seasons. Besides, untapped NR planting areas expanded due to low prices and a shortage of tappers—a matter of increasing concern in Thailand and Malaysia. The forecast decline in production would help to support NR prices to adjust higher, reflecting current NR fundamentals.