Indonesia rubber output to fall in 2000<\/p>\n
HAT YAI, Thailand (Reuters): Indonesian rubber output is
\nexpected to fall by as much as five percent in 2000 to around
\n1.47 million tonnes from last year's 1.55 million tons, a top
\nIndonesian Rubber Association official said on Thursday.<\/p>\n
\"Due to low rubber prices last year, some farmers in some
\nregions have shifted to other cash crops such as oil palm,\"
\nSuharto Honggokusumo, executive director at Indonesia's rubber
\nassociation told Reuters in an interview.<\/p>\n
In addition, prolonged rain in other regions this year had cut
\noutput, he added.<\/p>\n
Last year, rubber prices fell sharply to their lowest level in
\n30 years at an average of around 23 U.S.cents\/lb, mainly due to
\nweak global demand, Honggokusumo said.<\/p>\n
Indonesia's main rubber growing areas are in North Sumatra,
\nSouth Sumatra and Kalimantan on Borneo island, officials said.<\/p>\n
Indonesia, the world's second largest producer of rubber,
\nproduced 1.64 million tonnes in 1998, they added.<\/p>\n
Meanwhile, the country's rubber exports in 2000 were estimated
\nto be steady as last year's 1.4 million tonnes, supported by an
\nexpected improvement in the U.S. economy this year.<\/p>\n
\"However, if the U.S. economy in the second half of the year
\nis not as good as expected, Indonesia's exports volume could
\npossibly be lower than estimated,\" Honggokusumo said.<\/p>\n
Around 75-80 percent of Indonesia's total rubber output each
\nyear normally goes to the U.S. market, he added.<\/p>\n
Indonesian officials said it was difficult to predict how much
\nrubber the country had sold so far this year.<\/p>\n
Indonesia's rubber price trend in the second half of the year
\nwould mainly depend on the rate of the local currency, said T.B.
\nTjandra, board member of the Indonesian Rubber Association.<\/p>\n
Due to concerns over the fluctuation of the rupiah, currently
\naround 8,710\/8,725 per dollar, most Indonesian sellers sold
\nrubber only for nearby shipment. The furthest forward sales were
\nfor September shipment, Honggokusumo said.<\/p>\n
Despite current low world prices, the Indonesian government
\nhad yet to adopt any policies to discourage rubber farmers from
\nthe crop, Indonesian rubber officials said.<\/p>\n
\"The government has yet to initiate any incentive that would
\nbe enough to change rubber farmers' minds,\" Tjandra said.<\/p>\n
In Thailand, the world's top producer of rubber, the
\ngovernment has tried to trim output in a bid to prop up prices by
\ngranting financial support to farmers who shift to an alternative
\ncrop -- oil palm.<\/p>\n
Meanwhile, the rubber price this year would partly dictate
\nIndonesian rubber output in 2001, the officials said.<\/p>\n
\"That would also depend on this year's prices. If farmers
\nperceive that this year's prices are very low, in 2001 they might
\nshift to other crops,\" Tjandra said.<\/p>\n
So far, farmers in most Indonesian growing areas generally
\nwere still satisfied with the current price, he said.<\/p>\n
\"They are still happy as long as their income from tapping one
\nkg of rubber can buy two kg of rice,\" Tjandra added.<\/p>\n
The Indonesian officials are in Hat Yai for a rubber meeting
\nheld between June 29 and July 1.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesia-rubber-output-to-fall-in-2000-1447893297",
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