* Govt agencies and state companies to buy 500,000 T of rubber
* Govt to launch 1 mln hectares replanting program (Adds minister, industry group comments)
By Bernadette Christina Munthe
JAKARTA, March 24 Indonesian government agencies and state owned companies will buy 500,000 tonnes of domestically produced rubber to help support prices, the government said on Thursday as it launched a replanting program.
The government gave no details on the timing of the purchases, but the Indonesian rubber association (Gapkindo) said it expected demand should come from infrastructure development, such as using rubber in asphalt mix for roads.
Indonesia is the world’s second-biggest producer of natural rubber, but prices touched seven-year lows last month due to a chronic supply glut and a slowdown in imports by top consumer China.
“This revitalisation is aimed at increasing domestic production to boost demand and change the rubber price at the global level,” Agriculture Minister Amran Sulaiman said in a statement.
The government would provide subsidised loans to farmers to replant 1 million hectares of rubber plantation between 2016 and 2019.
Gapkindo chairman Moenarji Soedargo said the move to buy rubber was in line with a plan by Asia’s top producers to cut exports by 615,000 tonnes for six months from March to support prices. (Reporting by Bernadette Christina Munthe; Writing by Fransiska Nangoy and Gayatri Suroyo; Editing by Richard Pullin)
