Rubber prices continue to rise on fear of tight supply

Bernama reports (Friday, October 19, 2007) that Malaysian rubber prices were up for the third consecutive day on Thursday as major buyers worried about the tight supply, a dealer said. The rainy season in major rubber producing countries has raised concerns that the current production may not be able to cope with the increasing local and overseas demand, he said. The dealer said the sharp increase in rubber prices on the Tokyo Commodity Exchange (TOCOM) and high crude oil price have also pushed up prices, adding that rubber price may touch 772 sen per kg.

A higher crude oil price encourages the use of natural rubber instead of synthetic rubber which is made from petrochemicals. Oil prices are currently hovering at record high levels. Yesterday in New York, oil price went up to US$89 per barrel before settling at US$87.40. At noon, the Malaysian Rubber Board official physical price for tire grade SMR 20 climbed 8.5 sen to 764.5 sen per kg compared with yesterday's closing of 756 sen while latex in bulk rose two sen to 501 sen per kg from 499 sen.

Meanwhile, the unofficial sellers' closing price for tire grade SMR 20 increased by eight sen to 768 sen per kg from 760 sen yesterday and latex in bulk went up three sen to 502 sen per kg from 499 sen previously.

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