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As the sting of increasing oil and fuel prices continues to resonate throughout the healthcare industry, glove manufacturers are among those feeling the most pressure in determining how to react.
Glove manufacturer Sempermed USA (Clearwater, FL) recently posted an urgent bulletin on its Web site reporting dramatic increases in the price of its raw materials - the two key components of which are latex and oil.
Sempermed's bulletin noted that "the rubber used for disposable latex gloves is harvested and traded per metric ton on the open market and is referred to as "wet" latex. The daily price of wet latex can be found on the Malaysian Rubber Board's website. As of February 6th 2006, wet latex was trading at $1,414.70 per metric ton. This is an increase of 19% since January 2006 and over 79% from the beginning of 2005. The costs involved in the production of latex and synthetic gloves are invariably linked to the price of oil. The price of a barrel of oil traded at $67.86 on January 31, 2006, an increase of over 50% since the beginning of the 2005.
"In addition, the increase of oil and fuel prices drive up freight costs, which directly affects the manufacturer's ability to deliver their products," Sempermed continued. "Companies can offset some of these costs in other areas, but price increases are inevitable."
Meanwhile, in late January, Bloomberg News reported, "The Malaysian Rubber Glove Manufacturers' Association said it plans to raise prices by at least 8.7 percent in line with higher prices of natural rubber and warned that rubber prices will stay high. Natural rubber traded on the Tokyo Commodities Exchange has gained 29 percent over the past six months to 234.8 yen ($2) a kilogram, near a 21-year high." The price of rubber is likely to stay high in the current quarter as "continuous rains have disrupted supply," the association stated.
Like Sempermed, most glove manufacturers either have already raised prices or are expected to do so after exhausting their options for trimming costs in manufacturing processes or elsewhere. In addition, a number of glove makers are introducing revamped synthetic alternatives that are designed to more closely mimic the strength and performance properties of latex but sans the proteins that are linked...