By Engku Shariful Azni Engku Ab Latif
KUALA LUMPUR, Oct 5 (Bernama) -- The local rubber market is expected to trade range-bound with a bias towards moving higher, following growing concern about severe climate change as the weather seems more unpredictable, said industry expert Denis Low.
He said the ongoing rainy days in the rubber-producing regions hamper rubber tapping function and reduce latex yield.
“The Association of Natural Rubber Producing Countries (ANRPC) revised its forecast for the shortage of natural rubber (NR) this year and warned that increased shortages may persist until 2028.
“ANRPC has lowered its forecast for the supply of natural rubber due to unfavourable climatic conditions as the El Nino phase transitions into La Nina, along with a widespread leaf fall disease negatively impacting both yield and quality of rubber latex,” he told Bernama.
Denis also noted that NR demand appears to be on the rise, causing a sharp rise in global rubber prices during the first eight months of this year.
He mentioned that economies are trying to grapple with expensive shipping rates and a volatile US dollar, which represents uncertainties and may warrant caution and fear at the same time.
“The current geopolitical situation is also pushing certain commodity prices beyond expectations while curtailing others,” he said.
On the other hand, a dealer said the NR prices would continue to track the performance of regional rubber futures markets, the ringgit’s strength against the US dollar coupled with benchmark crude oil prices and tight NR supply.
He added that market operators would monitor updates on the US and Chinese economies, especially cues on interest rate cuts, Chinese stimulus implementation, the European Union Deforestation Regulation (EUDR) developments and geopolitical conflicts in the Middle East.
On a Friday-to-Friday basis, the Malaysian Rubber Board’s (MRB) reference price for Standard Malaysian Rubber 20 (SMR 20) increased by 5.5 sen to 870.5 sen per kilogramme (kg) from 848.5 sen per kg last week.
Meanwhile, latex-in-bulk rose by 28.5 sen to 736.5 sen per kg from 708 sen per kg previously.
At 5 pm, physical SMR 20 stood at 871 sen per kg, while latex-in-bulk was at 739.5 sen per kg.
-- BERNAMA
