Rubber Prices Likely To Move Higher Next Week On Weather Concerns
By Abdul Hamid A Rahman
KUALA LUMPUR, Oct 3 (Bernama) -- The Kuala Lumpur rubber market is expected to see volatility in supply and demand next week, with prices likely to move higher before stabilising, largely depending on weather conditions, said industry expert Denis Low.
He said the market is also expected to see significant speculative buying and selling.
“There are reports of strong winds and heavy rainfall in major rubber-producing regions, and this is certainly affecting productivity.
“We will continue to see heavy rainfall, and hopefully it will ease soon enough for production to recover before we enter the monsoon season in November and December,” he told Bernama.
Low said there is volatility in both demand and prices, while speculative buying remains prevalent.
He said the Thai Meteorological Department (TMD) had forecast thunderstorms, strong gusts and isolated heavy to very heavy rain in parts of Thailand.
“As for Malaysia, the weather authorities have forecast thunderstorms, heavy rain and strong winds in several parts of the country,” he said.
Low said the current geopolitical situation is also pushing the prices of certain commodities beyond expectations while weighing on others.
“Volatile oil and gas prices are serious issues that can affect businesses, while the continued strength of the US dollar can be detrimental to the balance of payments,” he said.
Echoing a similar view, the Malaysian Rubber Glove Manufacturers Association (MARGMA) said weather conditions, particularly the El Niño in Southeast Asia and the flooding in Thailand, are expected to affect rubber production.
“Latex prices may remain firm, as a recent report by the Association of Natural Rubber Producing Countries indicated that global production could decline amid increasingly erratic and drier weather conditions.
“Trading sentiment may also remain mixed due to ongoing conflicts in West Asia,” it said.
On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for SMR 20 increased 4.5 sen to 1,044.5 sen per kilogramme, while latex in bulk rose 19 sen to 749.5 sen per kilogramme.
-- BERNAMA