RUBBER MARKET TO EDGE UPWARD AMID NORTHEAST MONSOON IMPACT - EXPERT

By Engku Shariful Azni Engku Ab Latif

KUALA LUMPUR, Nov 23 (Bernama) -- The local rubber market is expected to trade sideways with a slight upward bias due to the Northeast Monsoon, which can last for several months, said industry expert Denis Low.

He said while stock replenishment is necessary, further need in stocking up is a big challenge given the impending bad weather.

“If the Thai Meteorological Department is correct, the strengthening Northeast Monsoon is forecast to bring isolated heavy rains in the south of Thailand, while the upper and lower Gulf of Thailand will experience increased wave activity.

“Rubber production would be severely affected if the fields are flooded as well,” he told Bernama.

Hence, Low believes that the market will be trading cautiously next week amid sluggish demand.

Low highlighted that the European markets are hit by a three-month low due to heightened tensions in the Ukraine-Russia conflict.

He said investors have shifted towards safe-haven assets, while oil prices surged on fears of potential supply disruptions.

“Given the potential for tariff increases on United States imports and possible new trade conflicts after Donald Trump’s return to the White House, analysts have suggested a cautious approach to all commodity prices and demand.

“Therefore, the market would continue to be tempered by uncertainties in both supply and demand,” Low said.

In a statement, the Malaysian Rubber Glove Manufacturers Association (MARGMA) said that the local rubber prices would continue to track the performance of regional rubber futures markets.

This is due to the stronger ringgit against the US dollar, coupled with benchmark crude oil prices and ongoing concerns about the shortage of global natural stocks.

It said market operators would continue to monitor further cues on the outlook of the US interest rate path, further Chinese fiscal stimulus and geopolitics in the Middle East and Eastern Europe.

“Traders also will be watching for any cues on the Organisation of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) plan to postpone increasing crude production next,” the association said.

On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) decreased by four sen to 844.5 sen per kilogramme (kg), while latex-in-bulk inched up 3.5 sen to 681 sen per kg.

At 5 pm yesterday, the price of SMR 20 stood at 842 sen per kg and latex in bulk was at 684 sen per kg.

-- BERNAMA