Rubber prices to surge further

  • Business
  • Wednesday, 06 Jul 2005

RUBBER prices, which rallied last year, have continued to surge this year fuelled by strong demand and soaring crude oil prices. 

Prices on the Tokyo Commodities Exchange are now close to the eight-year high set on March 15 last year.  

The resurgent price of rubber this year is attributed to firm demand for tyres in China and costlier oil, which has made synthetic rubber less competitive. Naturally, the high rubber price will increase the costs of tyre and glove makers. 

The Malaysian Rubber Glove Manufacturers' Association (Margma) said in a statement yesterday it viewed the increasing cost of rubber with “grave concern”.  

Rubber is the major cost component in the manufacture of rubber gloves. The association said the price of natural rubber latex had been on an upward trend since the beginning of the year. The price has gone up some 31% in the past six months from an average RM2.99 per kg on Jan 3 to RM3.93 currently.  

In the statement, Margma president KH Oon said: “All rubber glove manufacturers have experienced significant cost increases in fuel, chemical, packaging and logistics over the last two years. This has not been matched by corresponding increases in selling prices”. 

Rubber forms about 55% of the cost of manufacturing and the increased cost of the commodity would force an upward adjustment in pricing of up to US$2 to US$3.80 per thousand units just to recover the cost increase, he added.  

Oon said the health of the rubber glove industry, with continuing investment in R&D and high quality gloves, was at stake and urged glove buyers “to understand our members' predicament”.  

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