Indonesia’s export of natural rubber is forecast to reach 2.58 million tons in 2015, roughly similar to this year’s expected export performance but a 10 percent decline from the country’s rubber export in 2013. This year, local rubber companies have been negatively affected by sluggish global demand triggering international rubber prices touching three-year lows. Rubber production in Indonesia in 2014 is expected to reach 3.5 million tons, of which 90 percent is exported abroad (mostly to the USA, Japan, China, India and Brazil).
Indonesian rubber production in 2014 has been curbed by various matters, such as abundant rainfall at the start of 2014 and rubber producers’ lack of enthusiasm to plant rubber trees amid low rubber prices. Currently, the global rubber price is roughly USD $1.48 per kilogram, below production costs and therefore opting for other crops (for example palm oil) is more lucrative.
Chairman of the Indonesian Rubber Association (Gapkindo) Daud Husni Bastari targets rubber exports in the range of 500,000 and 600,000 tons in the first quarter of 2015. He added that the Indonesian government should spur domestic usage of rubber (for example using rubber in asphalt) in a move to boost rubber production.
Indonesia is the world’s second-largest rubber producer. Since the 1980s Indonesia’s rubber industry has grown steadily, with most rubber plantations located on the island of Sumatra. The government and large private estates play a minor role in the country’s rubber sector. Most of the rubber production – around 80 percent – is produced by smallholder farmers.
