Global rubber production faces continued challenges in 2025
Singapore – The global rubber industry is navigating a complex landscape in 2025, marked by a persistent shortfall in production and rising demand. For the fifth consecutive year, natural rubber production is expected to fall short of consumption, with output projected to increase marginally by 0.3% to 14.9 million metric tons, while demand is anticipated to grow by 1.8% to 15.6 million metric tons. This imbalance is driven by several factors, including stagnant output in major producing countries and a shift towards more profitable crops.
Indonesia and Vietnam, two of the world’s leading rubber producers, are experiencing significant declines in production. Indonesia’s output is expected to decrease by 9.8% from the previous year, totaling 2.04 million tons, while Vietnam may see a 1.3% decline to 1.28 million tons. These reductions are attributed to lower prices over the past decade, which have discouraged replanting and new planting efforts. Farmers in these regions have increasingly turned to more lucrative crops such as oil palm, further exacerbating the rubber supply shortage1.
Thailand, the world’s largest rubber producer, offers a glimmer of hope with a forecasted 1.2% increase in production for 2025, following a slight decline in 2024. However, this growth is insufficient to offset the declines in other major producing countries. Meanwhile, West African nations like Ivory Coast are seeing rising production, but their output remains too low to meet the surging global demand. The rubber market’s reliance on a few key regions underscores the need for diversification and investment in sustainable practices.
The automotive industry, a major consumer of natural rubber, continues to drive demand. As the global economy recovers and vehicle production ramps up, the need for rubber in tire manufacturing and other automotive components is increasing2. Additionally, the construction and consumer goods sectors are contributing to the rising demand for rubber products. This trend is expected to persist, putting further pressure on the already strained supply chain.
Sustainability and innovation are becoming focal points for the rubber industry. Companies are investing in eco-friendly production methods and renewable materials to reduce their environmental footprint. The market for sustainable rubber is projected to grow significantly, driven by consumer demand for green products and regulatory pressures. Innovations in synthetic rubber production, which relies on fossil fuels, are also being explored to enhance efficiency and reduce emissions.
Looking ahead, the rubber industry faces a challenging yet promising future. Addressing the supply-demand imbalance will require coordinated efforts from producers, governments, and industry stakeholders. Investments in sustainable practices, diversification of production regions, and technological advancements will be crucial in ensuring the long-term stability and growth of the global rubber market. As the world continues to prioritize sustainability, the rubber industry must adapt to meet these evolving demands while maintaining its vital role in various sector