The natural rubber (NR) market is expected to rebound due to favourable fundamentals, said Malaysian Rubber Board (MRB) director-general Datuk Dr Salmiah Ahmad.
“The strong economic growth of China and India coupled with anticipated higher average oil prices in 2010, points towards demand for the NR industry.
“A higher level of NR price is expected especially in view of tight global supply and declining stocks that are currently affecting both the producers and consumers,” she said in a statement yesterday.
“Also, Thailand and Malaysia would be experiencing the delayed seasonal lull of wintering from March to April which will reduce output by some 30% to 40%.”
She said the MRB was “deeply concerned” with the decline in prices and the volatility of the rubber markets.
Compared with the peak, prices have declined by more than 31% with tyre-grade SMR (Standard Malaysia Rubber) 20 closing at RM11.83 per kg on Wednesday.
However, MRB’s noon official physical price for SMR 20 rose 63.5 sen to RM12.59 per kg yesterday while latex-in-bulk improved 10 sen to RM8.705 sen per kg.
The MRB statement quoted the Association of Natural Rubber Producing Countries as saying that the Japanese earthquake would have limited impact on global demand as there was no damage to plants owned by major firms in Japan such as Bridgestone Corp and Michelin.
Bloomberg reported yesterday that Thailand, Indonesia and Malaysia would probably delay exports to counter a price slump, quoting Yium Tavarolit, the acting CEO of the International Rubber Consortium Ltd.