Rubber output likely to fall by seven percent<\/p>\n
JAKARTA (JP): Indonesia will fail to take advantage of the
\ncurrently surging prices of natural rubber on the world market
\nbecause a lengthy drought will probably slash its production by
\nseven percent this year, an industry executive says.<\/p>\n
"It's a pity because our rubber production is decreasing while
\nprices are increasing to their highest in four years," A.F.S.
\nBudiman, executive director of the Indonesian Rubber Association
\n(Gapkindo), told The Jakarta Post on Saturday.<\/p>\n
He explained that this year's dry season, which started
\nearlier than usual, has affected rubber plantations in the
\ncountry.<\/p>\n
The dry season has affected tens of thousands of hectares of
\nrice fields and secondary crops in Java, prompting the government
\nto support affected farmers by installing water pumps in fields
\ndepending on rainfalls and preparing cloud-seeding in areas close
\nto irrigation dams.<\/p>\n
Budiman said that rubber production in Thailand and Malaysia,
\ntwo other major producers, have also been affected.<\/p>\n
Natural rubber production in Indonesia, which covered about
\n3.2 million hectares of plantations, increased to 1.4 million
\ntons last year from 1.32 million tons in 1992. More than 85
\npercent of the production was exported.<\/p>\n
Demand<\/p>\n
Rubber prices increased to their highest level in four years
\nof 241.46 Malaysian cents per kilo on Friday due to soaring
\ndemands in China and falling production in Indonesia, Malaysia
\nand Thailand.<\/p>\n
According to Budiman, demand for rubber in China is estimated
\nto double to 1.2 million tons this year from 600,000 tons in
\n1993, while its production of natural rubber is likely to reach
\nonly 320,000 tons, and synthetic fiber 380,000 tons this year.<\/p>\n
The increasing prices prompted the International Natural
\nRubber Organization (INRO) to draw down its stocks in Indonesia,
\nMalaysia, China, Britain and the United States because last
\nweek's prices were far higher than the must-sell level of 236
\nMalaysian cents.<\/p>\n
Asril Sutan Amir, vice chairman of Gapkindo, said on Saturday
\nthat INRO's buffer stock manager has thus far sold about 120,000
\ntons from its stock of 220,000 tons.<\/p>\n
"Unfortunately, farmers and plantation owners cannot enjoy the
\nsoaring prices due to the long dry season," said Asril, adding
\nthat the current price level is 20 percent higher than usual.<\/p>\n
Asril said no one can predict how long this unusual situation
\nwill last or what is going to happen in the future.<\/p>\n
Natural rubber producing countries proposed last week that
\nINRO raise its reference to enhance its market facilitation.<\/p>\n
INRO's buffer stock manager began unloading INRO stocks after
\nprices went past the "may sell" level earlier this month and
\ncrossed the "must sell" level earlier last week.<\/p>\n
The buffer stock manager sold rubber for the 11th trading day
\nrunning last Friday but has had little success in curbing the
\nspiraling prices. (yns)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rubber-output-likely-to-fall-by-seven-percent-1447893297",
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"sponsor": "Okusi Associates",
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