Rub­ber glove prices may go up

Cost of raw ma­te­rial has risen due to af­ter ef­fect of Hur­ri­cane Irma

The Star Malaysia - StarBiz - - Front Page -

PETALING JAYA: Rub­ber glove prices may rise by as much as 9% to 12% within the next few days, mainly due to the af­ter ef­fects of Hur­ri­cane Irma.

Ac­cord­ing to the Malaysian Rub­ber Glove Manufacturers As­so­ci­a­tion (Margma), the dev­as­ta­tion has caused the prices of bu­ta­di­ene, an im­por­tant ma­te­rial in the pro­duc­tion of ni­trile la­tex, to soar as its pro­duc­tion has been se­verely af­fected.

“The rise in bu­ta­di­ene prices is ex­pected to con­trib­ute to an in­crease in ni­trile la­tex prices,” Margma pres­i­dent De­nis Low Jau Foo said in a state­ment.

Low added that be­sides the ris­ing cost of ni­trile la­tex, nat­u­ral rub­ber la­tex prices had also been af­fected by spec­u­la­tion, as the com­mod­ity is highly volatile.

“The In­ter­na­tional Tri­par­tite Rub­ber Coun­cil, which is made up of the world’s top pro­duc­ers of nat­u­ral rub­ber, will be hav­ing its an­nual meet­ing later this month. Usu­ally, when this hap­pens, the price of rub­ber tends to in­crease due to the an­tic­i­pa­tion of price-fix­ing and spec­u­la­tion,” he said.

“As manufacturers, we want nat­u­ral rub­ber prices to be sta­ble, and for farm­ers to be ad­e­quately com­pen­sated for their work, and not be sub­jected to un­rea­son­able spec­u­la­tion and prof­i­teer­ing,” he added.

He pointed out that ni­trile la­tex and nat­u­ral rub­ber la­tex are ma­jor cost com­po­nents in the man­u­fac­tur­ing of rub­ber gloves, and that it is im­por­tant that such hefty in­creases be prop­erly mon­i­tored and man­aged, es­pe­cially in the pric­ing for ex­port of gloves in the months ahead.

Margma is ad­vis­ing its mem­bers to re­vise their glove prices to bet­ter re­flect the sharp rise in pro­duc­tion cost.

It also cau­tioned its mem­bers to limit the va­lid­ity date to a shorter pe­riod so as not to get caught in the un­pre­dictabil­ity of rub­ber and bu­ta­di­ene prices.

Low said be­sides the ris­ing cost of raw ma­te­ri­als, an­other key fac­tor af­fect­ing rub­ber glove prices was the weak­en­ing of the US dol­lar (from RM4.49 to RM4.21 to the US dol­lar).

He added that the short­age of pa­per had pushed pack­ing ma­te­rial prices up by 15%.

Low said de­mand for rub­ber gloves be­tween Jan­uary and June 2017 had been ex­tremely en­cour­ag­ing, as rev­enue in­creased by around 25% to RM8.1bil from RM6­bil in the pre­vi­ous core­spond­ing pe­riod. Vol­ume rose 15.8% on the back of 8%-10% growth usu­ally.

“We ex­pect the sec­ond half of the year to be even bet­ter, as Europe and Amer­ica are buy­ing very strongly with Asia lead­ing the pack in terms of con­sump­tion.

“We un­der­stand from our mem­bers that most of them are in an over­sold ca­pac­ity po­si­tion, with some ma­jor players over­sold up to De­cem­ber,” Low said.

Price re­view: Margma is ad­vis­ing its mem­bers to re­vise their glove prices to bet­ter re­flect the sharp rise in pro­duc­tion cost.

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