KUALA LUMPUR: The local rubber market is expected to trade higher next week on the back of poorer yields influenced by non-stop heavy rainfall in rubber producing countries, said industry expert Denis Low.
He said the northern part of Peninsular Malaysia and Thailand are experiencing abnormal weather conditions, prompting Thailand's meteorological department to issue a heavy rainfall warning and advised residents to prepare for heavy to very heavy rainfall, flash floods and forest runoffs.
"There is a disparity in demand. Production of rubber in China and India cannot cope with local demand, coupled with the uncertainties of the weather condition, has put a strain on other rubber producing countries.
"Hence, there could be heavier stocking activities cum the usual replenishment process and this may cause a slightly heightened interest in the weeks ahead," he told Bernama.
Meanwhile, the Malaysian Rubber Glove Manufacturers Association (MARGMA) said the rubber market is expected to remain volatile and is subject to regional rubber market movement.
While the recent increase in prices may be supported by factors such as tight supply and positive economic indicators, MARGMA said the market is susceptible to fluctuations.
"We are also keeping an eye on weather conditions and the supply from major producing countries.
"A stronger ringgit against the US dollar could make Malaysian rubber less competitive in the global market, and if China's economy continues to weaken, demand for rubber products could also decline," the association said.
It added that fluctuations in oil prices would likely impact the cost of making rubber products and affect market sentiment.
On a Friday-to-Friday basis, the Malaysian Rubber Board's (MRB) reference price for Standard Malaysian Rubber 20 (SMR 20) increased by 10 sen to 800.0 sen per kilogramme (kg) from 790.0 sen per kg a week earlier.
Meanwhile, latex-in-bulk increased by 11 sen to 650.5 sen per kg from 639.5 sen per kg previously.
At 5 pm, the MRB reference price for physical SMR 20 stood at 795.5 sen per kg while latex-in-bulk was at 650.0 sen per kg.