KUALA LUMPUR, Malaysia—Natural rubber prices could see some increases in the near term due to increasing demand from China and tight supply until early 2021, according to the Malaysian Rubber Board.
Supply decline is due mainly to "erratic weather, reducing tapping activities, Pestalotiopsis leaf fall disease and wintering season in Southern Sumatera, Indonesia," MRB said in its monthly NR markets update.
On the other hand, MRB noted that uncertainties surrounding the COVID-19 pandemic could keep prices "range bound" in the coming months.
Kuala Lumpur prices, it said, likely will track the performance of the ringgit, crude oil prices and regional rubber futures markets.
In September, the Kuala Lumpur rubber market saw an early jump in the price of SMR 20, which reached the highest level since January 2020 at $1.40 per kilogram.
The market was supported by demand recovery from China and expectation on tight supply of natural rubber in major rubber producing countries, MRB said.
Toward the latter part of the month, however, prices drifted due to a spike in new COVID-19 cases globally, a stronger ringgit against the U.S. dollar, slumping oil prices and sharp losses in global equity markets.