Top supplier Malaysia sees no quick end to shortages in $8bn gloves industry

A couple wearing face masks amid the coronavirus pandemic attend their wedding ceremony at a mosque in Banda Aceh. (AFP)
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Updated 05 June 2020

Top supplier Malaysia sees no quick end to shortages in $8bn gloves industry

  • The global disposable gloves market was valued at $7.6 billion last year and is expected to reach $11.8 billion by 2025

KUALA LUMPUR: A global shortage of medical gloves due to a coronavirus-driven surge in demand will carry over into next year, Malaysia, the world’s biggest gloves supplier, said on Thursday, warning buyers to be wary of scammers promising quick supplies.

World consumption of the personal protective equipment is estimated to jump more than 11 percent to 330 billion pieces this year, two thirds of which are likely to be supplied by Malaysia, its rubber glove manufacturers association (MARGMA) said.

It recently received more than a dozen reports of frauds and fake agents claiming to represent member companies for glove supplies. Counterfeit company letters were produced to appoint bogus agents or potential customers were quoted “ridiculous” prices with a promise to cut short delivery time.

“Buyers are reminded that while glove prices have soared and demand is overwhelming, the industry’s supply is being fully booked until early next year,” MARGMA President Denis Low said in a statement.

“MARGMA foresees the shortage of gloves due to overwhelming demand this year to spill into 2021.”

The global disposable gloves market was valued at $7.6 billion last year and is expected to reach $11.8 billion by 2025, according to VynZ Research.

MARGMA, whose members include top-two players Top Glove Corp. and Supermax Corp, also said worker safety and welfare were being monitored “critically” as pressure increases to step up production.

Last week, a group of European politicians urged the European Union trade commissioner to make sure higher demand does not become an excuse for exploiting workers, who come mainly from Bangladesh, Myanmar and Nepal.

The US in March lifted a ban on imports from Malaysian glove maker WRP Asia Pacific after accusing it of using forced labor.

Developed economies, home to only a fifth of the world’s population, account for nearly 70 percent glove demand due to their stringent medical standards. 


Analysts urge Canada to focus on boosting the economy

Updated 06 July 2020

Analysts urge Canada to focus on boosting the economy

  • Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time

TORONTO: Canada should focus on boosting economic growth after getting pummeled by the COVID-19 crisis, analysts say, even as concerns about the sustainability of its debt are growing, with Fitch downgrading the nation’s rating just over a week ago.

Canadian Finance Minister Bill Morneau will deliver a “fiscal snapshot” on Wednesday that will outline the current balance sheet and may give an idea of the money the government is setting aside for the future.

As the economy recovers, some fiscal support measures, which are expected to boost the budget deficit sharply, could be wound down and replaced by incentives meant to get people back to work and measures to boost economic growth, economists said.

“The only solution to these large deficits is growth, so we need a transition to a pro-growth agenda,” said Craig Wright, chief economist at Royal Bank of Canada. The IMF expects Canada’s economy to contract by 8.4 percent this year. Ottawa is already rolling out more than C$150 billion in direct economic aid, including payments to workers impacted by COVID-19.

Further stimulus measures could include a green growth strategy, as well as spending on infrastructure, including smart infrastructure, economists said. Smart infrastructure makes use of digital technology.

“We have to make sure that government spending is calibrated to the economy of the future rather than the economy of the past,” Wright said.

Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time, citing the billions of dollars in emergency aid Ottawa has spent to help bridge the downturn caused by COVID-19 shutdowns.

Standard & Poor’s, Moody’s and DBRS still give Canadian debt the highest rating. At DBRS, Michael Heydt, the lead sovereign analyst on Canada, says his concern is about potential structural damage to the economy if the slowdown lingers too long.

Fiscal policymakers “need to be confident that there is a recovery underway before they start talking about (debt) consolidation,” Heydt said.

Fitch expects Canada’s total government debt will rise to 115.1 percent of GDP in 2020 from 88.3 percent in 2019.

Royce Mendes, a senior economist at CIBC Capital Markets, said the economy still needs more support.

“Turning too quickly toward austerity would be a clear mistake,” he said.