MALAYSIAN RUBBER MARKET SET TO RECOVER NEXT WEEK

By Engku Shariful Azni Engku Ab Latif

KUALA LUMPUR, July 20 (Bernama) -- Prices in the local rubber market are expected to recover next week due to enveloping bad weather conditions in the rubber-producing regions, said an industry expert.

Quoting the Thailand Meteorological Department, Denis Low said the agency predicted that Thailand would experience heavy rainfall and cautioned against flash floods and forest runoffs.

“Rubber tappers would be more cautious and expected to reduce tapping and other rubber processing activities.

“Lower rubber output would push up the stocking and replenishment activities of consumers,” he told Bernama.

Low also noted that the current geopolitical situation and the Red Sea crisis are causing supply chain problems and affecting commodity prices, leading to shortages of key resources such as oil and gas affecting industrial production worldwide.

He said the volatility of the exchange rate would have a significant effect on rubber prices and cause a dilemma as the current exchange rate tends to border on geopolitics rather than the real economy.

“Geopolitics and economic uncertainties of the world can be a boom or bane to rubber consumption.

“Hence, buyers may tend to take things rather cautiously,” he said.

Meanwhile, a dealer said the commodity would continue to track the performance of regional rubber futures markets, the ringgit’s strength against the US dollar, and benchmark crude oil prices amid optimism of earlier US interest rate cuts.

“Traders will keep an eye for further economic indicators from major economies, especially China’s upcoming economic policy while monitoring developments surrounding China-Europe tariff tensions and the ongoing geopolitics in the Middle East,” said the dealer.

On a Friday-to-Friday basis, the Malaysian Rubber Board’s (MRB) reference price for standard Malaysia rubber (SMR) 20 dropped 13 sen to 772 sen per kilogramme (kg) from last week, while latex-in-bulk slumped 39 sen to 615 sen previously.

At 5 pm, the MRB reference price for physical SMR 20 stood at 778 sen per kg, while latex-in-bulk was at 615 sen per kg.

-- BERNAMA