As first reported last month, natural rubber latex prices continue to rise behind a weakened global supply, despite peak season conditions in many rubber-producing countries. In Malaysia, one of the world’s largest producers of NRL, the commodity traded at over 637 sen/kg Friday–up about 6% from last month.
Adding to the causes behind the increased rubber prices:
- Production fell 11% from January-September 2009–the biggest drop in more than 34 years– due to adverse weather conditions in rubber producing countries, replanting, and a struggling global economy (Association of the Natural Rubber Producing Countries)
- Natural rubber prices are tied to crude oil, which is used to produce synthetic rubber alternatives. Crude oil prices are up nearly 20% since July, according to the US Department of Energy
- Earlier this week, China reduced import tariffs on natural rubber, driving prices on speculation that the country may ramp up buying. As one of the world’s largest tire producing countries, analysts suggest China may become more aggressive amidst a growing global automotive industry.
