The global natural rubber market is set to experience a substantial supply shortfall of nearly 400,000 metric tons in 2026, marking the sixth consecutive year of a deficit and putting upward pressure on prices, the Association of Natural Rubber Producing Countries (ANRPC) said.
According to the group, global production is forecast to reach 15.2 million tons, up 2.4 percent from 2025, while demand is expected to rise 1.7 percent to 15.6 million tons. The widening gap underscores persistent supply constraints amid growing industrial and automotive demand worldwide.
“Supply growth continues to fall short due to unfavorable weather, limited replanting of aging rubber trees, low productivity among smallholders, and competition for arable land,” the ANRPC said.
Conditions vary across major producing nations. Thailand, the world’s largest rubber supplier, is expected to maintain flat output, while Indonesia, the second-largest producer, is forecast to experience a decline. Côte d’Ivoire is set apart as the only top-three producer likely to see a significant rise in production, supported by expanded cultivation and improved yield management.
Global demand growth is being driven primarily by India and China, along with improved prospects in Europe and the United States. Rising new vehicle registrations in the European Union and increased tire shipments to the United States are cited as key drivers. Trade developments also play a role: a recent EU–India free trade agreement reduced tariffs on Indian rubber and polymer products, while a Washington–New Delhi interim pact cut tariffs on Indian rubber imports from 50 percent to 18 percent.
Price trends are reflecting the supply gap. World Bank data indicate that average TSR20-grade natural rubber, widely used in automotive manufacturing, rose 1.14 percent year-on-year to $1.77 per kilogram. In January 2026, TSR20 averaged $1.84 per kilogram, up 5.7 percent from December 2025, signaling continued upward pressure.
For leading producers such as Côte d’Ivoire, the market environment offers strong export opportunities. The Directorate General of Customs reports that between 2020 and 2024, Côte d’Ivoire exported an average of 1.47 million tons of natural rubber annually, generating roughly 1.068 trillion CFA francs (about $1.9 billion) in export revenues per year. Analysts suggest that sustained high prices could further boost earnings for high-performing producers.
Experts warn, however, that long-term supply stability depends on addressing structural challenges. Aging plantations, smallholder productivity constraints, and climate variability remain key risks. “Unless producers invest in replanting and modern cultivation techniques, the deficit could persist beyond 2026, keeping global rubber prices elevated,” the ANRPC noted.
Natural rubber is a critical raw material for tires, automotive components, and industrial goods, making its market dynamics closely linked to global manufacturing and transportation sectors. Recent supply deficits have already influenced manufacturers’ cost structures, prompting discussions on inventory management and alternative sourcing.
The 2026 shortfall also highlights the strategic role of West African producers, particularly Côte d’Ivoire, which has leveraged policy reforms and investment in plantation expansion to capture larger shares of global export markets. Economists say this trend could encourage other emerging producers in Africa to boost production, potentially reshaping the global rubber supply chain over the next decade.
While Thailand and Indonesia remain dominant suppliers, analysts expect that targeted investment in production efficiency and diversification of export markets will be critical in ensuring that supply keeps pace with growing international demand.
As the global market adjusts, consumers and industrial buyers are likely to face higher prices for rubber-based products, reinforcing the importance of strategic planning for manufacturers and policymakers alike.
