Global Market Volatility, Supply Concerns Likely To Drive Malaysian Rubber Prices Next Week

By Rosemarie Khoo Mohd Sani

KUALA LUMPUR, Aug 16 (Bernama) -- The Malaysian rubber market is expected to experience a mixed trend next week, as volatility in global commodity and financial markets continues to influence regional rubber futures, said the Malaysian Rubber Glove Manufacturers Association (MARGMA).

The association said key factors likely to drive the market include the latest United States (US) tariffs, the ringgit-US dollar exchange rate, and fluctuations in benchmark crude oil prices.

“MARGMA believes the tariffs could signal a slowing US economy, as they are expected to drive up the cost of imported raw materials.

“Additionally, heightened speculation regarding the appointment of the next US Federal Reserve chair is expected to contribute to market uncertainty,” it told Bernama.

The association added that developments related to US trade tariffs and interest rate policies, as well as geopolitical tensions in the Middle East, would closely be monitored by traders.

On the supply side, MARGMA said heavy rains anticipated in major rubber-producing countries, particularly Thailand, could disrupt supply.

In Malaysia, natural rubber production rose 5.9 per cent month-on-month in June 2025, indicating healthy production capacity.

It noted that the 90-day extension of the tariff pause between the US and China, together with China’s 7.2 per cent export surge in July and growth in its services sector, could lend support to demand.

Strong exports from the Chinese automobile sector are also seen as positive for the market.

Meanwhile, industry expert Denis Low said the market is likely to trade sideways with a slight downward bias given the prevailing uncertainty.

“Industries must take notice that the world’s two most populous nations, India and China, are still grappling with tariffs.

“China is in a 90-day grace period while India is facing a hefty 50 per cent across-the-board tariff.

“It is sad that such volatility can be triggered by the whim of a single person, affecting not just these two giants but the entire world,” he said.

Low also noted the potential disruptions from weather conditions, with forecast in Malaysia and the Thai Meteorological Department of heavy rain and strong winds.

“There is also volatility in the oil and gas prices which is serious enough to affect businesses while the runaway strength or weakness of the US dollar can be detrimental in the balance of payment.

“Such acute volatility represents uncertainties and may warrant caution and fear at the same time,” Low added.

On a week-to-week basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) rose 10.5 sen to 736.5 sen per kilogramme, while latex in bulk increased by 3.0 sen to 572 sen per kg.

-- BERNAMA