Gapkindo asks for credit facilities for retention program<\/p>\n
Johannes Simbolon, The Jakarta Post, Jakarta<\/p>\n
The Indonesian Rubber Producers Association (Gapkindo) has
\nasked the government to provide credit facilities for its members
\nto implement a rubber retention program agreed by Indonesia,
\nMalaysia and Thailand.<\/p>\n
Gapkindo's executive secretary Suharto Honggokusumo said on
\nThursday the credit facilities with low interest rate were
\nnecessary as not all of the association's members were
\nfinancially capable of continuing to buy rubber from farmers
\nwhile at the same time cutting their exports.<\/p>\n
Suharto said former minister of industry and trade Luhut
\nPandjaitan had promised to provide such credit facilities and the
\nassociation now hoped the current minister, Rini M. Soewandi,
\nwould deliver on the promise.<\/p>\n
He estimated the association's members needed about US$7.5
\nmillion per month to implement the retention program.<\/p>\n
\"Some of our members are financially able to carry out the
\nprogram, others are not. Thus, we expect the government in the
\nnear future to appoint banks from which our members could receive
\ncredit facilities,\" Suharto told The Jakarta Post.<\/p>\n
Indonesia, Malaysia and Thailand -- the world's three largest
\nproducers of rubber -- agreed on Wednesday to cut their rubber
\noutput and exports in order to prop up the sagging price of the
\ncommodity.<\/p>\n
The agreement was signed by Indonesia's Minister of Industry
\nand Trade Rini M. Soewandi, Malaysia's Minister of Primary
\nIndustries Lim Keng Yaik and Thailand's Deputy Minister of
\nAgriculture and Cooperatives Prapat Panyachatraksa on Wednesday
\nin Denpasar, Bali.<\/p>\n
According to the agreement, the world's top rubber producers
\nwould each cut output by four percent and exports by 10 percent,
\nstarting in January next year.<\/p>\n
The ministers refused to specify the price target aimed at by
\nthe retention program.<\/p>\n
However, they were all concerned about decreasing rubber
\nprices, which they said had started in 1997 and turned worse more
\nrecently amid the global economic slowdown.<\/p>\n
\"The rubber price now hovers around 45 U.S. cents per kilogram
\n(kg) on the international market, as against the peak price of
\n$1.50 per kg the commodity once reached,\" Rini told a media
\nconference on Wednesday.<\/p>\n
The three countries will establish the International
\nTripartite Rubber Organization (ITRO), based in Bangkok, to
\nmonitor both output and the export cuts.<\/p>\n
ITRO will start working in early February, Rini said.<\/p>\n
The three countries would each set up a national body to
\nmanage and monitor implementation of the output and export cuts.<\/p>\n
Indonesia, Malaysia and Thailand account for almost 80 percent
\nof the world's rubber production.<\/p>\n
Rini said both the Malaysian and Thai governments had
\nallocated funds to finance the retention, but the Indonesian
\ngovernment did not have money to do so.<\/p>\n
As such, Rini said, the government had asked local rubber
\nexporters to continue buying rubber from farmers and, at the same
\ntime, curb their exports.<\/p>\n
Suharto said Gaikindo's members were committed to making a
\nsuccess of the retention program as they were optimistic that it
\nwould shore up rubber prices.<\/p>\n
The government's data indicates that Indonesia has 3.4 million
\nhectares of rubber plantation, with a total output of 1.6 million
\ntons. Of this, 1.4 million tons are exported, according to
\nSuharto.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/gapkindo-asks-for-credit-facilities-for-retention-program-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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