5 Nov 2020
Higher prices supported by rising demand from China and tight supply
Kuala Lumpur – Natural rubber prices could see some improvements in the near term due to increasing demand from China and tight supply until early 2021, according to the Malaysian Rubber Board (MRB).
Supply decline is due mainly to “erratic weather, reducing tapping activities, Pestalotiopsis leaf fall disease and wintering season in Southern Sumatera, Indonesia,” said MRB in its monthly NR markets update 10 Oct.
On the other hand, MRB noted that uncertainties surrounding the Covid-19 pandemic could keep prices ‘range bound’ in the coming months.
Kuala Lumpur prices, it said, will likely track the performance of ringgit, crude oil prices and regional rubber futures markets.
In September, the Kuala Lumpur rubber market saw an early jump in the price of SMR 20, which reached the highest level since January 2020 at 580.00sen/kg.
The market was supported by demand recovery from China and expectation on tight supply of natural rubber in major rubber producing countries, MRB said.
Towards the latter part of the month, however, prices drifted due to a spike in new Covid-19 cases globally, stronger ringgit against the US dollar, slumping oil prices and sharp losses in global equity markets.
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