Natural rubber prices in Malaysia climbed to a new high, extending an unbeaten run that started a month ago.

That should be good news for local rubber plantation owners, who are mostly smallholders but not for rubber glove makers.

Top Glove Corp Bhd has been hit with a double whammy – from rising latex input cost and the weakening US dollar that translated to lower earnings in ringgit for every US$1 worth of gloves sold.

“The last six months had a strong sense of deja vu for Top Glove ... high latex price and weakening US dollar experienced in 2008,” CIMB Securities said on 13 Oct. 2010 following a briefing held by the world biggest glove maker on 12 Oct.

Oficial data showed the tyre grade Standard Malaysian Rubber 20 (SMR 20) rose 2.4% on 13 Oct. 2010 to a new high of RM11.65 a kg.

The Malaysian Rubber Board centrifuged latex price rose 1% to RM7.62 a kg on 13 Oct. 2010 – the highest since the previous peak of RM7.71 a kg in mid-April.

Top Glove’s quarterly net profits had been on the decline the past two quarters from recent peak of RM70 million posted in three months ended 28 Feb this year. Its management indicated that demand was rising, but expected the pace to only pick up if latex prices reverse course.

Meanwhile, concerns over tight supply due to weather havoc and increased purchases from China, would probably keep natural rubber prices bouyant.

Rubber price in Tokyo, the global benchmark rose as much as 2.3% to 335.7 yen per kg on 13 Oct.

That is the highest level since 16 April.

China, the world’s largest consumer of natural rubber, imported 190,000 tonnes of the commodity in September, a 19% gain from the previous month, according to press reports which were based on customs agency data.

(Syed Rashid Ali, Karachi, Pakistan)