By Michael Taylor
JAKARTA, Oct 12 (Reuters) – Indonesia’s rubber output isexpected to ease next year due to the effects of an El Nino andhaze from forest fires, the main rubber group in the world’sNo.2 producer said on Monday, but is seen unchanged in 2015 at3.2 million tonnes.
Indonesia is expected to face moderate El Nino dryconditions which could strengthen from September to December,while fires on Sumatra and Kalimantan have shrouded large partsof Southeast Asia in so-called “haze”.
While it was too early to give a production forecast fornext year, haze conditions preventing farmers from tending theirtrees, a lack of sunshine and dry soil would all hinderproduction.
“It will go down next year but we are still doing analysis,”Moenardji Soedargo, chairman at the Indonesian RubberAssociation (GAPKINDO) told Reuters. “Compared to last year,2015 is more or less unchanged.”
Indonesia’s rubber exports were likely to fall slightly to2.5 million tonnes this year from 2.6 million tonnes in 2014, headded, due to increased domestic demand.
“The price level today doesn’t reflect the actualfundamentals – it’s been overdone,” he said.
Top rubber producing countries have previously looked tosupport prices by introducing floor prices, export curbs orfarmer subsidies, which have had limited success.
Soedargo said farmers who sold 1 kg of rubber were currentlyonly able to buy 0.5 kg of rice, compared with around 2 kgpreviously, a level that had remained stable even during otherdownturns.
“It is devastating. It should be a concern to allstakeholders,” he said, adding that some farmers had startedcutting down their rubber trees to sell the timber.
The loss of trees could hold back production when globalactivity improved, Soedargo said, particularly as Indonesianrubber trees had a lot of room to increase yields compared withother producing countries.
About 20,000 hectares of trees had been replanted this year,out of total plantings of 3.65 million hectares, as part ofefforts to rejuvenate farms where trees had passed theirmaturity.
GAPKINDO was in talks with the government about help to fundand arrange a bigger re-planting and rejuvenation rubber packagefor the country. (Reporting by Michael Taylor; Editing by Richard Pullin)
