KUALA LUMPUR: The Malaysian Rubber Glove Manufacturers Association (Margma) said glove pricing is set to rise as the cost of nitrile and natural latex has surged by more than 55 per cent.
“There has been a whopping spike in prices of nitrile and natural latex in the last few months," said Margma president Denis Low Jau Foo.
"We have no choice but to raise glove prices accordingly. Our profit margins are squeezed by mounting costs," he told the New Straits Times in a telephone interview today.
Synthetic latex, the main feedstock to make nitrile medical gloves, has spiked in price by more than 55 per cent to US$1,490 per tonne from US$946 per tonne in Sept 2016.
Similarly, the price of natural latex has jumped by more than 55 per cent from an average of RM4.56/kg compared to the current price of RM7.15/kg.
Low noted that the sudden spike in natural latex prices is due to severe flooding in southern Thailand, which has disrupted rubber tapping activities.
Closure of butadiene plants in the Middle East and Singapore has led to a global shortage and this has also contributed to the drastic jump in nitrile latex prices.
"Nitrile latex is derived from butadiene. It is very much influenced by butadiene demand from China's revival of its motor industry," Low said.
He went on to explain that a surge in raw material costs needs to be properly managed, as glove manufacturers price their exports in the months ahead.
"The most common variant of powder-free medical gloves is quoted at US$22 per 1,000 pieces. We foresee prices going up by 10 to 15 per cent in the months ahead," he said, adding that it is necessary to regain fair returns on investment to ensure further expansion.
Similarly, Low calculated that the average nitrile glove, selling for US$19 per 1,000 pieces last month, will now have to absorb additional costs of US$2.50 per 1,000 pieces.
"Glove counters in the stock market have seen a cautious approach by investors due to the rising cost. As such, it is natural that glove manufacturers are doing the necessary to manage the current volatile situation," he said.
Margma is a grouping of some 50 members, representing 90 per cent of glove manufacturers in the country, including suppliers and service providers.