JAKARTA, April 25 – Indonesia’s rubber output will struggle to match last year’s figure of 3 million tonnes due to wet weather in the world’s second-largest producer, the head of the rubber industry association said on Thursday.
“It could be less than 2012,” Daud Husni Bastari, chairman of the Indonesian Rubber Association (GAPKINDO), told Reuters. “It could be 3 million maybe.”
The latest estimate is lower than a previous 2013 output forecast from GAPKINDO of 3.2 million tonnes given in early January.
Domestic rubber consumption is about 500,000-600,000 tonnes with the rest shipped to countries like the United States, China and Japan, Bastari added.
Last August, Indonesia and fellow producers Thailand and Malaysia, which account for about 70 percent of world output, agreed to cut down rubber trees and trim exports by 300,000 tonnes in an effort to shore up global prices.
Although Thailand, the world’s largest producer of rubber, has said it would stick to the terms of the pact for two more months, Indonesian trade ministry officials have argued that the pact should be abandoned.
Under the pact, Thailand agreed to reduce exports by 150,000 tonnes, Malaysia was to hold back up to 50,000 tonnes and Indonesia around 100,000 tonnes.
The Thai government has supported and compensated its rubber farmers, while no such support was available in Indonesia, said Bastari, whose association brings together exporters, plantation firms and traders.
“Thailand have the funds and a budget,” he added. “In Indonesia it is done only by the private sector.”
Given the growing emergence of other Asian rubber producers, like Vietnam, Bastari said a group of rubber producing countries within the Association of Southeast Asian Nations (ASEAN) would achieve better results in any future price supporting efforts.
Producer grouping, the International Tripartite Rubber Corp, will next discuss price trends as well as the supply and demand situation at their May meeting, but no date has yet been fixed.
Source: Reuters
