Indonesia is not worried about a recent slump in prices for rubber as market fundamentals remain strong, the industry body in the world’s No.2 producer of the commodity said on Monday.
Moenarji Soedargo, chairman of the Indonesian Rubber Association (Gapkindo), made the comment in the wake of a weekend meeting of the main international rubber producer group, held in Indonesia.
He declined to give details of discussions at the gathering, where producers had been expected to talk about rubber prices that touched seven-month lows early this month, partly due to a slowdown in imports by top consumer China.
“Supply and demand conditions now are quite healthy, even better than two years ago,” Soedargo said.
“Fundamentals are good, Gapkindo is not worried about prices.”
He added that global rubber stocks currently stood at around 2.4 million tonnes, down from more than 3 million tonnes in 2015.
“What is happening now is technical factors … are affecting market condition and putting pressure on prices,” he said, without elaborating.
Soedargo also said that Indonesian production would taper off over the next few months as part of the usual production cycle, helping tighten global supply and supporting prices.
“Starting July, leaves will start falling and rubber production will gradually drop from month to month … until September,” he said.
(Reporting by Bernadette Christina Munthe and Fransiska Nangoy; Writing by and Osamu Tsukimori; Editing by Joseph Radford)
