Amanda Siddharta
Research expert covering Malaysia
Rubber industry in Malaysia - statistics & facts
As one of the members of the International Tripartite Rubber Council—a multilateral agreement that was signed in 2001 together with Thailand and Indonesia—Malaysia plays an important role in the rubber industry in Southeast Asia. It was also the sixth leading producer of natural rubber in the Asia Pacific. The industry itself contributed around 1.8 billion Malaysian ringgit to the country’s gross domestic product (GDP).
Nevertheless, Malaysia’s rubber industry has been facing several challenges over the years, with the declining price of rubber and the overreliance on smallholder farmers for its natural rubber production. As a result, the industry’s contribution to the GDP has declined compared to the previous years.
The manufacture of rubber gloves in Malaysia nearly doubled when the pandemic first started and declined significantly in 2023 after the world had returned to normal. Nevertheless, the manufacturing of rubber products provided job opportunities for many Malaysians. As of 2023, there were more than 117,000 people working in the rubber manufacturing industry in Malaysia.
In 2022, the Malaysian Ministry of Plantation and Commodities launched the Rubber Industry Transformation Project to help increase the income of smallholder rubber farmers, reduce the economic burden due to the decrease in rubber price in Malaysia, and provide more incentives for rubber production. With these initiatives, the government hoped to improve Malaysia’s rubber industry in the near future.
Nevertheless, Malaysia’s rubber industry has been facing several challenges over the years, with the declining price of rubber and the overreliance on smallholder farmers for its natural rubber production. As a result, the industry’s contribution to the GDP has declined compared to the previous years.
The COVID-19 pandemic was a lifeline for Malaysia’s rubber manufacturing
Malaysia’s rubber production had been declining for the past few years as the country could no longer compete with bigger rubber producers like Thailand. However, the COVID-19 pandemic presented new opportunities for the rubber manufacturing sector in the country. Since 2020, there has been an increase in demand for personal protective equipment like rubber gloves.The manufacture of rubber gloves in Malaysia nearly doubled when the pandemic first started and declined significantly in 2023 after the world had returned to normal. Nevertheless, the manufacturing of rubber products provided job opportunities for many Malaysians. As of 2023, there were more than 117,000 people working in the rubber manufacturing industry in Malaysia.
More support for smallholder farmers
Rubber in Malaysia was mainly produced by individual farmers, with more than one million hectares of rubber plantation belonging to these smallholder farmers, unlike palm oil which was often grown on plantation estates owned by large companies. However, because the commodity was not as profitable as palm oil, coupled with the lack of support for the farmers’ welfare and additional challenges caused by climate change, many chose to abandon their rubber farms, contributing to the decline in production.In 2022, the Malaysian Ministry of Plantation and Commodities launched the Rubber Industry Transformation Project to help increase the income of smallholder rubber farmers, reduce the economic burden due to the decrease in rubber price in Malaysia, and provide more incentives for rubber production. With these initiatives, the government hoped to improve Malaysia’s rubber industry in the near future.
