The global market for rubber is forecast to return to positive growth in June 2020, with natural rubber usage forecasts increasing by 0.4 per cent after falling in April (-23.1 per cent) and May 2020 (-10.1 per cent).

The Malaysian Rubber Board (MRB) said demand from China , the world’s largest consumer of natural rubber, is expected to rise to support its growth in the automotive sector, with vehicle sales rising 4.4 per cent year-on-year in April 2020 after recording negative growth over the past 21 months.

The condition reflects that the rubber industry is rising strongly in parallel with the rise in the world’s natural rubber production, since the majority of countries across the world have increasingly eased lockdowns and go back to regain their economies. 

It will give the global economic network a strong boost, including the natural rubber sector and production, the MRB said, adding that after witnessing a dramatic fall in prices on April 2, 2020, the SMR 20 rubber prices are now showing a positive change in the range from April 6 to May 29, 2020 between RM4.60 and RM4.95 per kilogram.

One of the key factors supporting the price increase was the recovery of the world’s natural rubber market with the most countries’ easing movement restrictions, particularly China, which has resumed operations in the manufacturing industry following Covid-19 ‘s implementation of lockdowns since late January 2020.

This is also driven by strong increases in the global crude oil sector, which currently stands at US$ 35 a barrel, and a global scarcity of natural rubber supply, as rubber demand worldwide is projected to fall by 2.3 per cent to 13.43 million tons in 2020 relative to the previous year due to the movement control order (MCO) and the wintering season in rubber manufacturers.

In the meantime, the government will continue to protect the welfare of smallholders by continuing to implement the Rubber Production Incentive (IPG) to help ease their burden during the period of low rubber prices, and to encourage them to continue to tap to ensure sufficient supply of raw materials for the processing and manufacture of rubber-based goods.

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