Rubber Industry Expects To Be Brighter This Year

KUALA LUMPUR, April 13 (Bernama) -- The outlook for the rubber industry this year is set to be considerably brighter thanks largely to the recovery in the global automation sector.

In line with this, Malaysia's natural rubber output for 2010 will likely increase by 16 per cent to one million tonnes supported by higher prices compared with 900,000 tonnes last year.

"The outlook for natural rubber this year is expected to be positive especially with news of recovery and increased demand in the global automotive sector," said Dr Salmiah Ahmad, who was recently appointed Director-General of the Malaysian Rubber Board.

The higher production estimated this year would be due to more attractive NR prices which would encourage smallholders to tap their trees for more latex, she told Bernama Tuesday.

"During the first quarter of the year, the average price of Standard Malaysian Rubber (SMR20), the main rubber grade used in the tyre manufacturing industry, more than doubled to RM10,140 per tonne from RM4,990 per tonne recorded in the same quarter last year," she said.

In addition, the price of SMR20 reached a new historic high of RM10,515 per tonne, last seen on July 3, 2008, at RM10,510 per tonne.

She said rubber prices were expected to be firm due to declining stocks in major consuming countries coupled with fears that the supply situation may worsen due to the political situation in Thailand.

Soaring natural rubber prices were also attributable to the wintering season in Malaysia, Indonesia and Thailand, she said.

"Major consumers are buying now because of wintering. They can't get anything cheaper. The cost of raw material is high," she added.

Salmiah also said the price rally on the Tokyo Commodity Exchange and strong demand from China's motor vehicle sector would also contribute to firmer natural rubber prices.

Turning to offtake, she said for the first quarter of the year, Malaysia was set to export 208,600 tonnes of natural rubber, up 32.2 per cent or 50,743 tonnes from the same quarter last year.

(bernama.com)