COVID-19 pandemic to push up rubber price, demand for rubber gloves – MRB

The COVID-19 pandemic will drive up the rubber price in the market to a higher level as well as increase the demand for Malaysian rubber gloves this year, said the Malaysian Rubber Board (MRB).

Director-general Datuk Dr Zairossani Mohd Nor said economic experts had projected that Malaysia would control 65 per cent of the global rubber gloves market in 2020, up 3.0 per cent from 62 per cent share currently.

He said the 3.0 per cent increase is equivalent to RM3 billion additional income to the country but this would depend on the COVID-19 situation.

Meanwhile, he stressed that the overall local rubber industry expands at 5-6 per cent annually.

“If we look at the rubber industry in Malaysia particularly the rubber glove sector, it grows every year since the 1980s.

“It came about also because of a disease, that is, HIV or Human Immunodeficiency Virus which destroys a person’s immune system and causes AIDS (Acquired Immunodeficiency Syndrome). From this, the rubber glove sector in Malaysia expanded until today whereby we are the biggest producer in the world,” he told Bernama.

He was a guest speaker on Bernama TV’s ‘Ruang Bicara’ programme on ‘COVID-19: Effects on the Rubber Industry and its Future Direction’.

Zairossani said during any pandemic, the rubber industry and sectors related to healthcare are among the sectors that will get the benefits especially the rubber glove sector.

“Besides rubber glove, we also manufacture catheters, a device for surgery (which requires rubber elements),” he said.

He said in the face of low rubber price, the saviour of the rubber industry in Malaysia is the glove sector, which is expected to grow by 5.0 to 25 per cent, depending on the COVID-19 development.

In 2019, Zairossani said the sector contributed RM17 billion which made a big impact, hence, Malaysia should ensure its glove sector maintained its position as the leader in the global market.

He also commented that the rubber control mechanism is not a function of the MRB, the Rubber Industry Smallholders Development Authority (RISDA) or any agencies involved in the rubber industry or the government.

”Rubber price is controlled by the global market. Generally, looking at the historical performance of the industry, it goes up and down, this is the cycle, and currently, for 2020/21, it is in the down cycle,” he said.

The rubber price, which fell from RM3.00 per kilogramme (kg) a few years ago to RM1.70 a kg at present, has also caused hardship to those involved in the rubber industry particularly tappers and smallholders.

He said some of the smallholders are still confused about the functions of MRB and other related agencies such as RISDA, Federal Land Development Authority (FELDA) and FELCRA.

“The main objective of MRB is to develop technology, policies and strategies for the rubber industry through research activities,” he said, while stressing that MRB do not handle smallholders directly.

MRB would then transfer the product technology to the related industry, while RISDA would assist in transferring the technology to the smallholders.

Zairossani said many quarters opined that the rubber industry is a sunset industry, for both upstream and downstream activities, but it cannot be denied that rubber contribution to the country’s export increases year-on-year.

Since 1990 till now, the rubber industry has expanded by 5-6 per cent annually and is the fastest growing industry in Malaysia.

“In terms of contribution to the economy, our export was RM1.3 billion in 1990, now it’s RM31 billion,” he said.

At the global level, Zairossani said Malaysia has a market share of only 3.0 per cent of the rubber industry value worldwide and he believed there are tremendous opportunities for expansion.

“Even though we only control three per cent, we are able to contribute RM40 billion (to national income) if we include rubber wood export, while rubber production amounted to RM31 billion,” he added.

“Towards this end, we must ensure strategic development for the rubber industry and smallholders cannot continue producing rubber using methods employed 20-30 years ago,” he said.

Zairossani said the smallholders must adopt technological usage as land are scarce, and the best way is to increase production via technology.

“I am confident and have the foresight that Malaysia’s rubber industry has a bright future in store for it,” he added.

Source: Bernama

Posted on : 18 April 2020