By Durratul Ain Ahmad Fuad
KUALA LUMPUR, Oct 12 (Bernama) — The local rubber market is expected to trade sideways with a downward bias next week influenced by the escalating Red Sea crisis and the European Commission’s (EC) proposal for a year-long delay to the EU Deforestation Regulation (EUDR), said industry expert Denis Low.
He told Bernama that the escalating Red Sea crisis is slowing down rubber stocking and replenishment activities and putting pressure on global trade.
“When economies are jostled, more uncertainties will prevail and demand of most goods and commodities can be affected,” he said.
On the EC’s proposal to delay the EUDR, he said buying activities will be confined to stock replenishment on a steady basis.
“These uncertainties will inevitably affect industrial consumption and production of rubber globally, causing demand and prices to be volatile,” he added.
He also said traders need to be cautious as the uncanny weather in rubber-producing regions can hamper rubber production.
“Rubber production will be severely affected if the fields are flooded. The weather has become unpredictable of late,” he said.
Another dealer said market operators will continue to monitor updates on the United States and China economies, especially cues on interest rate cuts, Chinese stimulus implementation, EUDR developments and Middle East geopolitical conflict.
The Malaysian Rubber Glove Manufacturers Association said the rubber market outlook for next week appears to be positive, with the market remaining upbeat.
On Thursday, the Statistics Department Malaysia (DoSM) said Malaysia’s natural rubber (NR) production fell by 5.2 per cent to 35,979 tonnes in August 2024 against 37,960 tonnes a month ago.
Year-on-year, DoSM said NR production rose by 14.9 per cent from 31,309 tonnes in August 2023.
On a Friday-to-Friday basis, the Malaysian Rubber Board’s (MRB) reference price for Standard Malaysian Rubber 20 (SMR 20) went down by 19.5 sen to 851 sen per kilogramme (kg) from 870.5 sen per kg last week.
Latex-in-bulk rose by 12.0 sen to 748.5 sen per kg from 736.5 sen per kg.
At 5 pm, physical SMR 20 stood at 853.5 sen per kg while latex-in-bulk was at 749 sen per kg.
— BERNAMA
