KUALA LUMPUR — The Malaysian rubber market is expected to trend higher next week on the back of stronger oil prices. A dealer said the higher oil prices would push up rubber prices as industry players would quickly switch to natural rubber from petroleum-based synthetic rubber. He said the uptrend would also be driven by expectations that Thailand, the world’s largest rubber producer, would discuss on the possibility of freezing rubber production in the near future.
It was reported that the Thai government planned to encourage rubber smallholders to chop down 350,000 rubber trees annually to stem a 60 per cent slide in natural rubber prices for the past three years. However, the dealer said the increase in local rubber prices might be capped by a stronger ringgit as this would make the commodity more expensive and less attractive to international traders. For the week just-ended, the local market was mostly mixed, driven by the stronger crude oil prices, but capped by firmer ringgit against the US dollar. On a Friday-to-Friday basis, the Malaysian Rubber Board’s official physical price for tyre-grade SMR 20 lost 1.5 sen to 517.0 sen a kg, while latex-in-bulk gained 11.5 sen to 441.5 sen a kg. The 5 pm unofficial closing price for SMR 20 declined seven sen to 519.0 sen a kg, while latex-in-bulk appreciated 12 sen to 444.0 sen a kg.
