MALAYSIA: Rubber industry retains pole position

Malaysia's rubber industry retained its pole position in 2021 compared with other commodities, notching impressive growth and contribution to the country’s coffers as demand and production of rubber gloves were largely unperturbed by COVID-19 containment measures.

Malaysia is the world’s leading producer of medical gloves and demand for the products due to the pandemic has turbo-charged the industry to dizzying heights and along the way minted new billionaires in the country. The country has met 68 per cent of the global demand for this necessity for the past 30 years and for 2021, it is estimated to supply 280 billion pieces of rubber gloves. In fact, the year saw new players joining the bandwagon to tap into new opportunities by venturing into rubber glove production despite the fact that the average selling price (ASP) is expected to fall further by 30-50 per cent in the near future amid increasing market competition.

Burgeoning demand saw exports of the rubber products as of October rise 55 per cent to MYR 71 billion from the same period in 2019 and for the whole year, it is expected to reach MYR 82 billion, up by 38 per cent, versus MYR 59.4 billion in 2020. Out of that, natural rubber contributed MYR 7 billion (8.5 per cent), rubber products MYR 63 billion (77 per cent), other rubber MYR 2.5 billion (3.0 per cent), and heveawood MYR 9.5 billion (11.5 per cent).

According to the Malaysian Rubber Board (MRB), the rubber product sector especially rubber gloves plays an important role in generating high export value due to the surge in global demand for this product to curb the COVID-19 pandemic. For the first nine months of 2021, rubber production amounted to 354,359 tons, about five per cent lower than in the corresponding period of 2020.

Despite the relatively higher Standard Malaysian Rubber 20 (SMR20) prices year-on-year, output dropped marginally, attributed to shortage of tappers owing to cross-border travel restrictions imposed by the government to contain the spread of the virus and the impact of Pestalotiopsis leaf fall disease that reportedly affected about 30,000 hectares of rubber plantation in Peninsular Malaysia. During the period, the smallholding sector produced 90.3 per cent of the national output.

Rubber production for 2021 is expected to fall by 2.9 per cent to 500,000 tons while the average price of SMR 20 will range between 680.00 sen per kilogram (kg) and 700.00 sen per kg, up by 24-28 per cent, as compared to 548.03 sen per kg in 2020. Meanwhile, the average price of latex-in-bulk is expected to range at between 560.00 sen per kg and 590.00 sen per kg, up 14-20 per cent.

Source: Bernama News Agency, Kuala Lumpur; 14 Dec 2021
(Syed Rashid Ali, Karachi, Pakistan)