Bank guarantees hinder rubber exports: Association<\/p>\n
JAKARTA (JP): The Indonesian Rubber Association yesterday
\nrequested the government to abolish its rule requiring importers
\nto provide bank guarantees when importing metal boxes used for
\nrubber export.<\/p>\n
\"We need the government's support. So, please, no more bank
\nguarantees for metal boxes. It has created additional costs,\" the
\nassociation's chairman, O.K Cornel, told journalists here
\nyesterday.<\/p>\n
Cornel said that rubber is increasingly being packed in metal
\nboxes for container freight. Because of possible contamination,
\nmetal boxes have replaced the wooden boxes traditionally used for
\nrubber freight.<\/p>\n
There are only enough metal boxes, which are relatively new to
\nrubber shipping, to freight 300,000 tons of rubber per annum
\nworldwide, while the world's annual rubber output is six million
\ntons.<\/p>\n
Cornel said that Thailand and Malaysia did not burden its
\nrubber exporters with bank guarantees on imported metal boxes,
\neven though they are the largest users of the boxes.<\/p>\n
The Indonesian government, through a finance ministry decree
\non Jan. 25, 1996, actually abolished import duties and taxes on
\nimported metal boxes used for export.<\/p>\n
However, the government still requires rubber exporters to
\nprovide bank guarantees when importing metal boxes: Rp 100,000
\n(US$42,680) a box (A 40-feet container holds 208 metal boxes).<\/p>\n
\"It is not the money that we are complaining about, but the
\nby-products of that requirement. The government knows all about
\nit, why don't they just abolish it altogether,\" said the
\nassociation's executive director, A.F.S. Budiman.<\/p>\n
If the government does not tackle the matter soon, Budiman
\nwarned, Indonesia would lose its share of the United States'
\nrubber market to Malaysia and Thailand, which are extremely
\naggressive in that market. The United States has strict codes
\nregarding rubber quality.<\/p>\n
He said the U.S. market is important to Indonesia because over
\n60 percent of its total rubber exports go there.<\/p>\n
Indonesia, the world's second largest rubber producing country
\nafter Thailand, exported 1.32 million tons of rubber last year,
\nup from 1.24 million tons in 1994.<\/p>\n
Production<\/p>\n
The country produces some 1.5 million tons of rubber a year,
\nmainly in the provinces of North Sumatra, South Sumatra, Jambi
\nand West Kalimantan. Small land holders produce 75 percent of
\nIndonesia's rubber. Their plantations make up 83 percent of
\nIndonesia's rubber plantation areas.<\/p>\n
Indonesia's total rubber produce comprises 90 percent
\ntechnically specified rubber, 6 percent ribbed smoked sheet, 3
\npercent latex concentrate and 1 percent other rubber products.<\/p>\n
Cornel said Indonesia faces stiff competition not only from
\nMalaysia and Thailand but also from some African countries,
\nespecially Nigeria, Cameron and Ivory Coast.<\/p>\n
As the quality of their rubber improves, they will easily
\nsteal Indonesia's share of the U.S. market because they are
\ncloser to the market. The delivery time from Africa to the United
\nStates, for example, is between 10 and 12 days, compared with 30
\ndays from Indonesia.<\/p>\n
\"Fortunately, their production is still very small, compared
\nto ours,\" Cornel said, adding that Indonesia will easily beat
\nThailand to become the world's largest rubber producer,
\nconsidering its vast acreage and low labor costs.<\/p>\n
But Cornel warned that natural rubber faces gloomy prospects
\nin the long run because of rapid technology advancements in the
\nproduction of tires and synthetic rubber. (rid)<\/p>",
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