[28 Jan] Exports of Malaysian Rubber Products Expected to Hit 3 billion US dollars

Malaysia's rubber products export is expected to hit 11.1 billion ringgit (3.26 billion US dollars) with rubber gloves generating exports valued at 7.7 billion ringgit (2.26 billion US dollars) in 2010, local media reported Tuesday.

The rubber industry was expecting a considerable improvement this year, given the recovery in the global automotive sector and the expected sterling performance of the rubber gloves field, Teo Suat Cheng, CEO of Malaysian Rubber Export Promotion Council (MREPC), was quoted by the local daily The Star as saying.

According to the report, export of rubber products is expected to have reached 10.56 billion ringgit (3.11 billion US dollars) in 2009, with rubber gloves likely to have exceeded 7.1 billion ringgit (2.09 billion US dollars).

The export value was short of the 11.2 billion ringgit (3.29 billion US dollars) achieved in 2008 due to tight labour supply, increased cost of utilities, increasing competition from neighbouring countries and hard market conditions in the local traditional markets.

Meanwhile, Malaysian Plantation Enterprises and Commodities Minister Bernard Giluk Dompok said local rubber manufacturers needed to ensure that their products met stringent quality requirements.

Promotions have to be more aggressive and consistent to maintain the country's market share in the already established and emerging markets like China, Russia, India and Brazil, in order to remain competitive, said the minister.

Dompok also said in the past decade, local rubber products manufacturers managed to double the export value in 2009 and they should reap benefits provided by MREPC.

(Source: irco.biz)

MIDF Downgrades Rubber Glove Sector To Neutral

KUALA LUMPUR, Jan 27 (Bernama) -- MIDF Research has downgraded the rubber glove sector to "Neutral" from "Overweight" due to concerns over sustainability of global glove demand growth, expected excess glove production capacity and earnings margin sustainability.

"After the remarkable surge in 2009, the price momentum carried through in 2010 with a 15.9 per cent - 30.3 per cent year-to-date," it said in a research note on Wednesday.

However, moving forward, MIDF Research said the returns prospect of glove companies are expected to be less promising from the risk-reward perspective.

The research house said the market is expecting global glove demand to hit about 150 billion pieces this year, with a growth rate of eight to 10 per cent annually.

"Although we also anticipate glove demand to continue rising, mainly from developing countries, there is a risk that the growth demand will be lower, considering that the domestic glove production and export values last year were not as high as reflected by consensus estimate of eight to 10 per cent per annum," it said.

For the cumulative 11 months last year, production volume and export value grew by only 2.0 per cent year-on-year and 0.8 per cent year-on-year to 42 billion pieces and RM6.46 billion, respectively.

"In addition to lower volume, the slower growth in export value was also attributable to lower average selling price in tandem with the lower average latex price in 2009," MIDF Research said.

It said there was no guarantee that lower average selling price would lead to higher demand and export volume, adding that the diminishing threat of the H1N1 viral outbreak would be a drag on demand.

MIDF Research said glove makers were expanding their production capacity more aggressively this year with an average increase of 26.6 year-on-year growth.

"An additional capacity of 15 billion pieces of glove is expected to be available by the second half of this year. In 2011, the glove makers planned to expand their capacity by another 16 billion pieces of glove," it said.

MIDF Research said earnings margin should be safeguarded in the first half of this year given the higher plant utilisation rate and better pricing power.

"We believe margin sustainability is highly dependent on the issues of demand sustainability and excess production capacity," it added.

(Source: bernama.com)

Natural rubber prices likely to remain high

Supply is tight due to drop in production while demand is up

PETALING JAYA: Current fundamentals look favourable for natural rubber (NR) prices to stay bullish, said Association of Natural Rubber Producing Countries (ANRPC) secretary-general Prof Djoko Said Damardjati.

He said there was a tight supply situation caused by a progressive decline in global production and a marked rebound in demand.

Yesterday, tyre-grade SMR 20 closed two sen higher at RM10.19 per kg while Latex-In-Bulk rose RM1.50 to settle at RM6.96 per kg.

ANRPC members – Cambodia, China, India, Indonesia, Malaysia, Papua New Guinea, Singapore, Sri Lanka, Thailand and Vietnam – account for almost 94% of the world’s rubber supply.

Djoko told StarBiz yesterday that none of the NR producing countries currently hold any NR buffer stock, contrary to a recent report on a buffer stock of 300,000 tonnes.

“Policies pursued in the major NR exporting countries are oriented towards ensuring the best price for NR with a view to enhance farmers’ income and improving export earnings,” he said.

He added that putting a cap on rubber prices was not on the agenda of major exporting countries.

According to ANRPC’s January 2010 newsletter, NR market continued to be bulllish from December 2009 to January this year.

The current buoyant rubber market was contributed by continued fall in global NR supply and a further drop anticipated in the coming months due to wintering.

There was also surging NR demand, especially from China and Malaysia.

Djoko said: “Malaysia posted a marked increase in NR imports of about 63.7% annualised rate in the second half of 2009.”

Last year, Malaysia imported 718,000 tonnes of NR compared with 523,000 tonnes in 2008.

China’s consumption of NR grew at an annualised 16.7% in the third quarter and 30.2% in the fourth quarter 2009.

In addition, the weakening US dollar against currencies of major NR exporting countries and the sharp rise in crude oil prices helped boost rubber prices.

In 2009, the total supply of NR of ANRPC members fell 5.1% to 8.686 million tonnes from 9.150 million tonnes in 2008.

The NR output in Malaysia dropped drastically by 22.1% as yielding area shrank by 20,000ha in 2009.

ANRPC said Malaysia’s estimated NR output for 2009 was 835,000 tonnes compared with 1.072 million tonnes in 2008.

Top producer Thailand also saw a 6.1% drop in supply last year as the estimated average annual yield came down to 1,576 kg per hectare from 1,698 kg per hectare in 2008.

Indonesia’s production fell 5.7% in 2009 as the average annual yield dropped to 937 kg per hectare from 994 kg per hectare the previous year.

However, for 2010, ANRPC expects NR production of Indonesia to increase to 2.77 million tonnes from an estimated 2.59 million tonnes in 2009.

(Source:biz.thestar.com.my)

[27 Jan] Phuoc Hoa Rubber 2009 Net Profit VND260.59 Billion

Phuoc Hoa Rubber Joint Stock Co., one of Vietnam's biggest rubber producers, said Tuesday that it had a net profit of VND260.59 billion ($14.1 million) last year. It didn't give comparative figures for the previous year.

Revenue was VND1.04 trillion, beating its full-year target by 17%, the company said in a statement.

Phuoc Hoa said it targets a pretax profit of VND277 billion on revenue of VND731 billion this year.

The company plans to pay a cash dividend of VND1,800 a share this year, compared with VND2,200 in 2009.

(Source: irco.biz)

[27 Jan] Malaysian Rubber Products Export to Touch RM 11 bln This Year

Exports of rubber products is expected to touch RM11.1 billion this year following the recovery in the automotive sector worldwide.

Malaysian Rubber Export Promotion Council Chief Executive Officer Teo Suat Cheng said the rubber gloves industry alone is expected to contribute RM7.7 billion to the country's earnings, hence recording a sterling performance.

“We hope the council's new and improved incentives will assist rubber product manufacturers to achieve the forecast export performance," he said at the launch of this year incentives here today.

For 2009, export of rubber products are expected to reach RM10.56 billion with export of rubber gloves likely to constitute about 67 per cent of the total export value of rubber products.

The official export value for 2009 will only be released in March.

The council said rubber gloves contributed significantly to the exports of rubber products last year, especially the exports of medical gloves, which increased 25 per cent.

The revised, improved and new incentives launched by the council this year include a range of financial support for international trade exhibitions, product certification, laboratory accreditation, acquisition of market research reports, website development and production of promotional materials.

Earlier, Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said as the industry becomes more competitive, rubber manufacturers and exporters should explore new markets while continue to service existing markets to maintain competitiveness.

“Promotions need to be undertaken aggressively and consistently in maintaining our market share in established markets as well as expand market share in emerging countries such as China, India, Russia and Brazil," he said in his speech.

He said the export of Malaysian rubber products have been dependent on traditional markets such as the United States, Western Europe, Japan and Singapore which accounted for over 65 per cent of total rubber exports.

“We have to strategically plan our market promotion policy, to protect and increase Malaysia's market share in existing markets and to conquer new markets for Malaysian rubber products," said Dompok.

He said rubber manufacturers should also aim to produce high value, high priced products and sell consumers quality and reliable products at a premium.

(Source: irco.biz)

[27 Jan] Asian Rubber Settles Lower Amid Long Liquidation, Weak Crude

Asian rubber futures settled lower Tuesday for the third successive trading day amid long liquidation due to weaker crude oil even though supply continues to remain tight in the physical market.

All gains made in early trading were erased as investors squared off positions as concerns remain on a U.S proposal to restrict proprietary trading by banks, which can affect liquidity in commodity derivatives.

The June contract on Tocom settled Y2.0 lower at Y284.0 a kilogram, off an intraday high of Y292.0/kg.

Prices fell further during the night session with the June contract hitting an intra-session low of Y281.1/kg, a level not seen in last three weeks. Night session prices aren't included in intraday trading.

The new benchmark July contract, which hit the trading board today, moved in a Y286.1-Y294.2 before settling at Y286.2.

Prices initially moved higher but couldn't sustain at levels above Y290/kg.

"Many investors don't want to hold long positions for a long period," said an analyst in Singapore.

He said weaker crude oil during Asian trading hours also weighed on prices.

At 1030 GMT, Nymex light, sweet crude for March delivery was trading 66 cents lower at $74.60 a barrel.

The benchmark May contract on the Shanghai Futures Exchange settled CNY125 lower at CNY24,465/ton.

The benchmark August contract on the Agricultural Futures Exchange of Thailand settled THB0.85 lower at THB101.90/kg.

Asian physical rubber prices were lower tracking losses in futures markets.

"Cash market prices followed futures markets higher for several weeks and are now moving lower in tandem," said a trader in Thailand. Indonesia's SIR20 traded around $2,990/ton, free on board for March/April shipment.

(Source: irco.biz)

Tight supply to push global rubber prices

Global natural rubber supplies are tight and the outlook is bullish on favourable fundamentals, the Association of Natural Rubber Producing Countries said.

“Exporting countries are oriented towards ensuring the best price,” said Djoko Said Damardjati, the association’s secretary general, in a newsletter. "That will improve farm income and export earnings," he said. No producer nation “holds any buffer stock,” he said.

Prices doubled in 2009, the best performance since at least 1976, driven by optimism that demand was increasing as the world recovered from recession and as producers curbed supplies. The association includes Cambodia, China, India, Indonesia, Malaysia, Papua New Guinea, Singapore, Sri Lanka, Thailand and Vietnam. Total output represents about 94 per cent of global supply.

“The statement is optimistic that prices could move up further,” said Umaporn Thepnuan, marketing official at Future Agri Trade Co. in Bangkok. Futures in Tokyo may climb to 350 yen a kg ($3,891 a tonne) should they close above 303.8 yen, the highest end-session level since September 2008, she said, using price history as a guide.

Thailand, Indonesia and Malaysia, the three biggest growers, view the current price as appropriate and agreed to take steps to counter any negative trends, according to a joint statement after a meeting last week in Kuala Lumpur.

The nations put on hold plans to curb exports as the economic recovery boosted prices and demand, the International Rubber Consortium, which represents growers and exporters, said October 27. Supply was cut after prices fell to 99.8 yen a kg ($1,103 a tonne) in December 2008, the lowest level since August 2002. The price has almost tripled since then to 284.6 yen a kg.

The industry is “passing through a situation of tight supply caused by a progressive decline in production and a marked rebound in demand,” Djoko said in the newsletter.

The association said it raised its prediction for output this year in Indonesia, the second-largest producer, to 2.77 million tonnes from 2.68 million tonnes. India’s production may total 853,000 tonnes, up from the previous estimate of 848,000 tonnes, it said.

Vietnam may produce 770,000 tonnes, up from 680,000 tonnes, and exports will probably be 750,000 tonnes, it said, without giving estimates for other countries.

(Source:.business-standard.com)