Post-pandemic, China’s cost competitiveness, coupled with the huge step-up in global glove manufacturing capacity, sent prices and utilisation rates for Malaysian glovemakers sharply lower, from record profits to losses. The imposition of sharply higher tariffs on Chinese imports by the US has provided some relief, allowing Malaysian producers to regain market share in the world’s largest economy.
Can prevailing high tariffs slapped on China exports to the US revive and benefit Malaysia’s struggling glove industry? While Malaysia remains the world’s largest producer of gloves, its market share has fallen from 63% in 2019 to about 45% currently (see Chart 1). A major turning point was the Covid-19 pandemic, when the sudden surge in demand and logistics disruptions led to a significant increase in glove prices, which in turn led to a stampede of new players into the industry. Glove manufacturing is low-tech, and factories can be set up very easily and quickly. In particular, China emerged as an extremely efficient, cost-competitive producer. The country has almost tripled its global market share, from a pre-pandemic 10% to 28% in five short years.
