KUALA LUMPUR: The rubber market is expected to see slight volatility this week, with a bias tendency for prices to move slightly upwards as weather conditions continue to affect production, says industry expert Denis Low.
Although rain is easing up in its intensity, it is still hampering rubber tapping in some areas, Low said.
“We believe climate change has been active, as we are seeing a shorter monsoon but a quicker wintering of the rubber trees.
“Wintering normally happens in late February to April. For this year, and in some areas, we may see wintering in late January or early February,” he said.
Both monsoon and wintering continue to affect rubber productivity, he said. Hence, it is advisable to take a cautious approach and stock up when rubber is available.
“Wintering can lower yield by as much as 45% to 50%. While the weather is certainly disadvantageous and may cause short supply, the world’s geopolitical situation is even more unstable and uncertain.
“Thus again, equalising out the supply-demand situation,” he said.
According to Low, the Thai Meteorological Department reported that the country had experienced colder weather, strong winds and drier air, while Malaysia warned of thunderstorms, with heavy rain and strong winds across Peninsular Malaysia.
Last week, a trader said the rubber market traded mixed on regional rubber futures performance. There were concerns over tightening raw material supplies in major natural rubber-producing countries due to wet weather.
“However, further gains were limited as market sentiment was pressured by uncertainty surrounding US trade policy, ongoing geopolitical tensions, and mixed performance in crude oil prices,” she said.
Oil prices were disrupted last week after the United States captured Venezuelan President Nicolas Maduro. The US administration said it plans to control Venezuelan oil over the long term.
The dealer said rubber prices are likely to move based on regional rubber futures, the strength of the ringgit against the US dollar, and changes in crude oil prices.
“Prices are also supported by concerns over natural rubber supply due to heavy rains in key producing countries, especially the risk of a sharp drop in production in Thailand after severe flooding,” she added.
On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) rose 17 sen to 760.5 sen per kg while latex in bulk was unchanged at 575 sen per kg. — Bernama
