Malaysia's natural rubber price is nearing a 20-year high due to strong global demand and tight supply of synthetic rubber caused by high oil prices, an industry official said today.

The price of standard natural rubber on the Malaysian Rubber Exchange traded at RM7.84 - RM7.86 ringgit (US$2.17) per kilo last Friday.

National Association of Smallholders vice president Aliasak Ambia said mounting tensions over Iran's nuclear programme were adding to the factors driving up the market.

"As it is, there are already concerns on a shortage of synthetic rubber supply and if war breaks out in Iran, natural rubber prices will go up for sure," he told the New Straits Times.

The price of petroleum-based synthetic rubber, a rival to natural rubber, has risen in tandem with oil prices which remain high due to concerns of conflict over Iran's uranium enrichment programme.

Strong demand

Analysts have attributed the strong price of rubber to demand in developed economies, as well as from India and China where the auto sectors are rapidly expanding.

Aliasak said the association's members, comprising more than 200,000 owners of smallholder plantations, will be the main beneficiaries if natural rubber hits a 20-year high of RM8 in the medium term.

Thailand, Indonesia and Malaysia - the world's top three rubber producers respectively - account for some 80 percent of the world's rubber natural rubber output.