The 2021 Blue Gloves Supply Challenge

In March 2020 some two dozen nations including Russia, Turkey, Iran, Pakistan, India, China, Kenya, Morocco, France, UK, Netherlands, Finland and Czech Republic, banned their medical supplies export which included gloves. The price for nitrile gloves, a name synonymous with medical gloves, shot up by as much as 300-1,200 percent.

Globally, nitrile comes second only to latex in its demand as it is costlier. However, it pips the latter in terms of performance by providing stronger protection from chemicals, infections and abrasions. Its powder-free variant goes one-step further to safeguard against skin irritation, cross-contamination in food, especially meat and allergies from latex.

The U.S Food and Drug Administration and Hazard Analysis Critical Control Point, jointly pronounced it is as the safest and the strongest material for use in food processing machinery and food handling. This blue-hued glove has applications in the automotive, oil and gas, healthcare, food processing, construction, chemical, and other industries. Even before Covid-19, a major chunk of its demand was from the healthcare.  

Made from rubber trees which grow in hot, tropical climates, nitrile gloves are exported mainly from Malaysia and China. In 2018, the U.S abruptly banned powdered gloves to address the health risks posed due to contamination and infection. This spiked the demand for non-powdered nitrile gloves. After a few months, the U.S imposed tariffs under Section 301 to make imports from China more expensive than before. This widened the gap in supply as other countries like Thailand, Malaysia, Sri Lanka, India and even the U.S, itself, couldn’t match China in terms of its materials availability and production capacity, which resulted in longer lead times. Some projects even reached a standstill due to the lockdowns imposed by those governments.

The same year Canada expedited its process for importing and selling medical gloves, including those made from nitrile. Though, the U.S and Canada have no provision for easing trade in non-medical gloves, it is to be noted that those articles are often used in other activities which are deemed essential. Thus, the demand for gloves, in general, is very high. Nitrile gloves, which can be easily sanitized with alcohol, have 68 percent of their demand stoked by the developed economies of EU, U.S. and Japan.

But to overlook its demand in the growing economies of the world would result in a gross underestimation. The Middle East continues to expand- with Bahrain adding a new terminal to its international airport, Egypt introducing a visa-free scheme for its tourists and Saudi Arabia gaining preference for medical tourism, and its booming food and healthcare industries continue to drive up the demand for nitrile gloves.

North Africa, too, has seen a surge in demand due to the pandemic. The drop in the oil prices has further encouraged these buyers in the Middle East and North Africa to substitute latex gloves with nitrile. Together, the nitrile segment in MENA is expected to register a CAGR of 16.3% from 2020 to 2027.

In October, the Indian government lifted its ban and moved nitrile gloves from ‘prohibited’ to the ‘restricted’ category list. 

With trade relations being renegotiated worldwide, financial services endeavor to lubricate the economy with their credit offerings. Merchant Credit and Guarantee Corporation Limited (MCG) is the latest among them to offer Letter of Credit to SMEs worldwide.