Anthrax fears lift glove demand, not rubber prices

Anthrax fears lift glove demand, not rubber prices

Vissuta Pothong, Reuters

The global anthrax scare is likely to increase demand for rubber gloves, but the threat of recession looming over the world economy will keep a lid on rubber prices, industry sources said on Thursday.

Malaysia, Thailand and Indonesia are the world's top rubber glove manufacturers, accounting for over 90 percent of the world market share.

They are also the top rubber producers and exporters with a share of almost 80 percent of world natural rubber production.

"The anthrax scare will increase demand for gloves, people are getting fearful of biological warfare," Choosit Opaswongse, president of the Thai Rubber Exporters' Association, told Reuters.

In the United States, several anthrax-contaminated letters have sparked fears of biological warfare in retaliation for U.S.- led military strikes on Afghanistan.

Anthrax is a sometimes fatal disease that can be contracted by breathing in the spores of the bacteria or having them in contact with the skin.

Traders said more buyers were seen in the latex market in recent days, but they were unsure whether the anthrax scare was the reason.

"Recently, we have seen more and more buyers in the market, looking to buy more latex for November-December shipment, and they give better prices," said one trader at a major firm in Singapore.

Malaysia is the world's top rubber glove manufacturer, exporting 11.5 billion pairs in 2000. Thailand is the second largest. Indonesia and India are the world's third and fourth largest respectively.

Traders said rubber prices were not expected to rise significantly given the weak global economy which has dampened demand for sheet rubber.

"It is quite difficult for the rubber price to rise as the whole world economy is not so good," said one trader based in Singapore.

Latex rubber accounts for a small percentage of the global rubber trade.

"It (the demand for gloves) is not expected to significantly boost rubber prices considering the much reduced demand from the auto industry due to the economic slowdown," Choosit said.

Each year, tire makers take up to 90 percent, in sheet form, of rubber from producing countries, while the rest goes to other manufacturers including the rubber gloves industry, traders said.

Thailand exports around 2.1 million tons of rubber each year, of which 85 percent is rubber sheet and the rest latex.