Rubber glove prices may go up
Cost of raw material has risen due to after effect of Hurricane Irma
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.