Rubber prices have been increasing as the demand has been surpassing production in 2025

Global natural rubber has been experiencing a constant rise in prices. The production levels have been failing to meet the significant demand for rubber, globally. 2025 is anticipated to be falling short of consumption, as slow supply growth struggles to keep pace with rising demand. Major producing countries like Indonesia and Vietnam have not expanded output significantly despite higher prices, limiting global availability.

Demand is increasing steadily in key consumer markets such as China, India, and Thailand, while supply remains constrained. The relative forecasted percentage difference between demand and production for natural rubber stands at approximately 4.7%, which is a considerable supply deficit.

Indonesia, the second-largest rubber producer, is expected to see a significant 9.8% decline in output in 2025, bringing total production down to 2.04 million tons. Vietnam’s production is also forecast to fall by 1.3% to 1.28 million tons. In contrast, Thailand, the world’s largest rubber producer, is expected to record a modest 1.2% increase in production in 2025, following a small decline of 0.4% in 2024.

Some growth in production has been observed in Ivory Coast, but this increase remains insufficient to meet rising global demand and compensate for losses in Southeast Asia. Meanwhile, demand from China and India, the world’s largest rubber consumers, is projected to grow by 2.5% and 3.4%, respectively, further tightening supply conditions.

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This sustained price pressure is expected to increase production costs for tire manufacturers and other industries reliant on natural rubber, reinforcing the challenges faced by global supply chains.