RUBBER MARKET TO SEE SLIGHT VOLATILITY WITH UPWARD BIAS NEXT WEEK

By Muhammad Fawwaz Thaqif Nor Afandi & Durratul Ain Ahmad Fuad

KUALA LUMPUR, Jan 10 (Bernama) -- The rubber market is expected to see slight volatility next week, with a bias tendency for prices to move slightly upwards as weather conditions continue to affect production, said industry expert Denis Low.

Although the rains are easing up on their intensity, the rain is still hampering rubber tapping in some areas, he said.

"We believe that 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 told Bernama. 

As usual, both monsoon and wintering continue to affect rubber productivity, he said. Hence, it is advisable to take a cautious approach and stock up a little when rubber is available.

"Wintering can lower yield by as much as 45-50 per cent.

“While the weather is certainly disadvantageous and may cause a short supply, the world’s geopolitics 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 a thunderstorm, with heavy rain and strong winds across Peninsular Malaysia.

For the week just ended, a trader said the rubber market traded mixed on regional rubber futures performance. There are 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 this week after the US captured Venezuelan President Nicolas Maduro with 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.

She said traders will closely monitor US-China trade relations, global economic data, developments in the semiconductor industry, and economic policies in major rubber-consuming countries amid ongoing geopolitical risks.

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 kilogramme (kg) while latex in bulk was unchanged at 575 sen per kg.

-- BERNAMA