Margma sees higher revenue for glove players on higher selling prices

This article first appeared in The Edge Financial Daily, on January 18, 2017.

KUALA LUMPUR: The Malaysian Rubber Glove Manufacturers Association (Margma) is positive about seeing annual growth in demand of about 8% to 10% for gloves and is forecasting higher revenue for glove players due to higher selling prices.

According to Margma, natural rubber latex’s average price has risen from RM4.56 per wet kilo in September to about RM6.59 per wet kilo in January 2017 (up to Jan 15). It stood at RM7.15 per wet kilo as of yesterday, representing a serious and sharp rise of about 45% from September to January.

Denis Low Jau Foo, president of Margma, said in a statement yesterday that incessant heavy rains and flooding in some areas have badly affected natural rubber products.

The association also calculated that glove prices should have risen by US$1.00 to US$1.50 (RM6.69) per 1,000 pieces from September to end of last year. From January 2017, there should be another increase of US$1.50 to US$2.00 per 1,000 pieces in tandem with the sharp rise in the cost of natural rubber latex.

Similarly, a sharp and significant rise in the cost of butadiene is seen.

Margma said that the shortage of butadiene was due to the closure of several plants. It added that the pickup in China’s motor car industry also contributed to the huge demand versus the less-than-usual production of butadiene.

This has contributed to the increase in the average selling price of nitrile latex, which stood at US$946 per tonne last September and has moved up to US$1,140 per tonne in the beginning of this year and is likely to move up by as much as US$250 to US$350 per wet tonne for February delivery.