Natural rubber prices jumped above 220 yen (current rate is 105.43 yen / $ 1) per kilogram, the highest level since July 2019. Increased demand for protective rubber gloves due to the COVID-1 coronavirus infection pandemic, as well as limited supplies, contribute to the rise in prices, Trading Economics reports.
Further support for prices comes from optimism about the Chinese economic recovery and the expectation that labor shortages in Thailand due to the pandemic could negatively impact supply.
On the other hand, demand for rubber from the automotive industry is expected to remain subdued due to the economic crisis and weakening demand for cars amid the pandemic.
The price of rubber fell to a record low of 129 yen per kilogram in April this year after stringent restrictive measures were introduced in several countries.
The International Tripartite Rubber Council, which includes Thailand, Indonesia and Malaysia, predicts a reduction in rubber production by the end of this year and in 2021. This is mainly due to unstable weather conditions, a decrease in harvesting activity due to a pandemic and plant diseases.
The main trading in rubber futures is on the Tokyo Commodities Exchange (TOCOM). The world's leading producers of this raw material are China, Indonesia, Malaysia and Thailand.