Latex Gloves: What is going on?

The pricing and supply of latex gloves has been extremely erratic due to the recent increases in latex raw material costs. Latex raw material is the “sap” which is secreted from the rubber tree when the tissue of the tree is injured. Rubber trees, like any agricultural products are highly dependent on environmental factors for a successful harvest. In particular, heavy rainfall and no frost.

The major export countries of latex gloves are Malaysia, Thailand, and Indonesia. So, what has been going on in these countries what have affected supply?

Latex and Rubber raw material: Market conditions

A few of the issues affecting the cost and output of latex gloves and rubber products at the start of 2011:

  • Trees naturally produce less latex in the winter season, which lasts until April.
  • China is on an economic upbeat and experiencing a significant uptick in new-car sales. This has produced a high demand for tires from this country, causing car manufacturers to place more and more orders for rubber despite climbing prices.
  • Rubber production in Thailand, the world’s largest grower and exporter, may decline as much as 8.3 percent this year from an earlier forecast if rain persists in the country’s south, according to the Thai Rubber Association. Thailand has experienced some of the worst flooding in rubber producing areas in 10 years.
  • Global concerns of a thin supply and growing demand affects trading, further driving up the cost of the material.
  • In the fall of 2010, the president of the Malaysian Rubber Glove Manufacturer’s Association, K.M. Lee, released a statement on the topic of latex glove pricing advising manufacturers to raise prices.

It is these factors which have led to an increase in demand and a shortage of supply of latex raw materaial – hence the recent price increases. Short to medium term forecasts expect much of the same, with demand well outstripping small increases in supply.

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Latex Gloves: Raw Material costs on the increase