RI asks ASEAN to help rubber processors<\/p>\n
JAKARTA (JP): Indonesia has asked other members of the
\nAssociation of Southeast Asian Nations (ASEAN) to establish a
\njoint venture to help rubber processors, says a local rubber
\nproducer.<\/p>\n
Chairman of the Rubber Association of Indonesia (Gapkindo), O.
\nK. Cornel, said here Thursday that the proposed company, to be
\ncalled ASEAN Rubber Corporation, was expected to raise loans from
\noverseas banks and channel the funds to rubber processors and
\nexporters in Indonesia, Thailand and Malaysia.<\/p>\n
\"If the proposed company raises a loan with an interest rate
\nof 6 percent per annum it can pass it on to a rubber processor or
\nexporter with an annual interest rate of 8 percent, far lower
\nthan the 18 percent charged by Indonesian banks,\" he told The
\nJakarta Post.<\/p>\n
The processors and exporters would be able to keep production
\ncosts lower than world market prices, he said.<\/p>\n
He said the current rubber price of US$1.02 a kilogram on the
\nworld market was too low for Indonesian exporters because
\nproduction costs ranged from 75 U.S. cents a kilogram for big
\nstate-owned plantation companies to about 90 cents for farmers.
\nFarmers contribute about 72 percent to Indonesia's total rubber
\nproduction of about 1.4 million tons a year.<\/p>\n
He said that compared to the reference price band of 74 cents-
\n$1.10 set by the International Rubber Organization, $1.02 was
\nhigh, but \"it is too low if we compare with our production
\ncosts\".<\/p>\n
Cornel said Gapkindo proposed forming the ASEAN Rubber
\nCorporation at a meeting of ASEAN's Rubber Business Club in
\nThailand last week, and rubber producers in Thailand were
\ninterested.<\/p>\n
ASEAN groups Brunei, Indonesia, Thailand, Singapore, Malaysia,
\nthe Philippines and Vietnam.<\/p>\n
\"We are trying to attract Singaporean companies, particularly
\nbanks, to join the proposed company so it will be easier to raise
\nloans,\" he said.<\/p>\n
He said Gapkindo also suggested village cooperatives provide
\nlow-interest loans for rubber farmers, particularly when they
\nwere forced to reduce latex production. Reducing latex production
\nis needed to prop up prices when the market is in an over-supply
\nand prices are low.<\/p>\n
Indonesian rubber farmers usually tap more latex to increase
\ntheir earnings when rubber prices are low and this causes prices
\nto fall further.<\/p>\n
\"Village cooperatives can raise their funds from the Jimbaran
\nGroup's big companies,\" Cornel said. (13)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-asks-asean-to-help-rubber-processors-1447893297",
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"sponsor": "Okusi Associates",
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