Rubber prices to increase slightly next year, says Malaysian Rubber Board

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Rubber prices to increase slightly next year, says Malaysian Rubber Board

By Meena Lakshana / theedgemarkets.com   | December 30, 2015 : 1:30 PM MYT

KUALA LUMPUR (Dec 30): Rubber prices are expected to increase slightly next year on the back of increased demand of tyres.

[size=16]Malaysian Rubber Board director general Datuk Dr Mohd Akhbar Said said today rubber prices are expected to increase in the third or fourth quarter of next year.

He said this at a press conference after the board signed a memorandum of understanding with Nadicorp Holdings Sdn Bhd for the trial use of environmental-friendly tyres.

"We expect a slight increase next year," he said.

"But the supply situation is likely to remain the same," he added.

However, he did not provide an estimate on the quantum of increase.

Rubber prices have dropped 71% since a high recorded in 2011, on the back of expanding supply but slowing global demand for natural rubber, Bloomberg reported today.

The report stated that as top producers like Thailand, Indonesia and Vietnam were encouraged by a decade-long rally in rubber prices to increase cultivation of rubber trees, rubber production will exceed use for two more years, with the surplus quadrupling in 2016, according to London-based research firm The Rubber Economist Ltd.

Mohd Akhbar said the governments of Thailand, Malaysia and Indonesia have agreed to increase the domestic consumption of rubber.

One of the ways the governments aim to do so is to increase the usage of rubber in roads, he said, adding the governments had pledged to use 300,000 tonnes of rubber from 2016 over a period of three years for roads
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