COVID-19 lockdowns in Malaysia threaten medical glove supply

Background: Malaysia produces the vast majority of rubber gloves used globally and in the U.S. 

The U.S. International Trade Commission estimated that 75% of all gloves imported into the U.S. last year came from Malaysia.

“Any change in Malaysia’s production sends ripples across the world for usage and prices,” Elizabeth Skokan, an international trade analyst with USITC, wrote in a June briefing about the subject.

The COVID-19 pandemic increased the demand for rubber gloves in 2020, making it hard to find gloves.

The Health Industry Distributors Association, a trade group representing medical distributors, estimated that demand for gloves jumped two- to threefold during the pandemic. In October, demand exceeded manufacturing capacity by almost 40%, according to HIDA.

In July 2020, the U.S. glove supply hit another hurdle. Customs and Border Protection started seizing some gloves made by Top Glove, a major manufacturer in Malaysia, because it suspected the company was using forced labor.  

In March, CBP announced that an investigation found the company is using forced labor and expanded the order to block Top Glove’s imports to the U.S.

In addition to the import bans, Top Glove shut down dozens of facilities due to a COVID-19 outbreak in November, according to CNBC. 

By January, the company had reopened its Malaysian factories, but the U.S. was still blocking many imports because of concerns about forced labor. 

Déjà vu: Now, a new COVID-19 outbreak is forcing Top Glove and Hartalega Holdings, another major Malaysian glove maker, to stop operations, according to Reuters.  

“Global customers of our manufacturers have been calling with great concern on the shortage of production and delivery of gloves to them,” Supramaniam Shanmugam, president of the Malaysian Rubber Glove Manufacturers Association, said, according to Bloomberg.

What’s next? In the recent USITC briefing, Skokan notes that several companies have expanded glove manufacturing capacity in the U.S., but it’s still only a small fraction of what the country needs.

Rhino Health plans on opening a glove manufacturing facility in Texas, which will more than triple its current capacity. Japanese manufacturer Showa Group, which operates glove factories in Alabama, plans to triple its production by 2022.

On Tuesday, Premier and Honeywell announced a partnership to produce nitrile gloves in the U.S. The companies expect to make 750 million gloves in the first year.

The U.S. imports more than 60 billion gloves each year. Currently, domestic manufacturers only produce 6.3 billion gloves per year, according to the USITC briefing.

“While the U.S. glove industry is expanding, it is not at a rate that will heavily impact domestic sourcing or alleviate the current glove shortage,” Skokan wrote.

China’s share of the rubber glove market has also grown during the COVID-19 pandemic, but Skokan writes that most health care providers prefer higher-quality Malaysian gloves.

Given the use of forced labor and continued COVID-19 outbreaks, Skokan expects glove shortages to continue well into 2022.