KUALA LUMPUR (Dec 30): Rubber prices are expected to increase slightly next year, on the back of increased demand of tyres from countries such as Europe, the United States and Japan, the Malaysian Rubber Board said today.
Its director general Datuk Dr Mohd Akhbar Said said rubber prices are expected to trend upwards, until the first half of 2016.
“We expect a slight increase in the first half of next year,” he said.
“Rubber prices will not go up to more than RM5.50 per kg for SMR 20 FOB (free on board),” he added.
He said rubber prices will likely dip after the first half of next year, stabilise and remain so, over two years.
“(This is because) the supply situation is likely to remain the same,” he added.
Rubber prices have dropped 71% since a high recorded in 2011, on the back of expanding supply, but slowing global demand for natural rubber, Bloomberg reported today.
The report stated that as top producers like Thailand, Indonesia and Vietnam were encouraged by a decade-long rally in rubber prices to increase cultivation of rubber trees, rubber production will exceed use for two more years, with the surplus quadrupling in 2016, according to London-based research firm The Rubber Economist Ltd.
Rubber prices of SMR 20 FOB is currently trading at RM4.81 per kg.
Mohd Akhbar said the governments of Thailand, Malaysia and Indonesia have agreed to increase the domestic consumption of rubber.
One of the ways the governments aim to do so, is to increase the usage of rubber in roads, he said, adding that the government had pledged to use 300,000 tonnes of rubber from 2016, over a period of three years, for roads.
