Declining prices lead to 11% drop in rubber exports
JAKARTA (JP): The export value of Indonesian rubber was likely to drop 11.25 percent this year to US$1.7 billion from $1.92 billion last year, a government official said yesterday.
Minister of Agriculture Sjarifudin Baharsjah said in his year- end briefing that the drop was due to a decline in rubber prices in the world market this year.
"What a pity the export value of rubber is not in line with the increase in production volume," he said.
Sjarifudin said Indonesia's volume of rubber which was exported increased 1.2 percent to 1.45 million tons this year from 1.43 million tons last year.
He said the drop in rubber prices was partly due to an excess supply in the world market, while demand was sluggish due to a decline in demand from primary buyers like Japan and South Korea.
The regional monetary crisis, which has also affected Japan and South Korea, has forced the two countries to reduce their budget for imported rubber.
Reuters reported that rubber prices in the world market dropped to about 70 U.S. cents per kilogram this month.
The average rubber price was $1.30 per kilogram last year, compared to $1.50 in 1995 and $1.10 in 1994.
Analysts warned early this year that rubber prices were likely to fall to below $1 per kg because the commodity's four-year marketing cycle was entering its downside after 1995 peaked with rubber prices hitting their highest levels.
Some Indonesian rubber producers were quoted by Antara as saying earlier this month that they could not make profits if the rubber price was below $1.
Other commodities
Although production of some major Indonesian commodities fell this year due to a severe drought which haunted the country, Sjarifudin said the export value of other agricultural commodities increased this year.
He said the increase was partly due to higher prices caused by demand.
The depreciation of the rupiah's value also made Indonesia's exports more competitive, he said.
He said the export volume of palm oil increased sharply by 21.31 percent to 2.44 million tons this year from 2.01 million tons last year.
"The export value of palm oil increased 21.96 percent to $1.29 billion this year from last year's figure of $1.06 billion," he said.
According to data from the ministry, the export volume of tea dropped slightly this year by 0.98 percent to 101,000 tons from 102,000 tons last year, while export value grew by 10.71 percent to $124 million this year from last year's figure of $112 million.
Although many analysts predicted that Indonesia would lose its title as the world's biggest robusta coffee producer this year, the country's export volume of coffee rose 11.99 percent to 411,000 tons from 367,000 tons last year.
The export value of coffee grew by 6.22 percent this year to $632 million from $595 million in 1996.
The export volume of cocoa dropped 5.26 percent to 306,000 tons this year due to the prolonged dry season, from 323,000 tons last year, but its export value was $378 million, similar to last year's figure.
The export value of pepper increased 26.6 percent to $125 million this year from $99 million in 1996. Its export volume was stable at 36,000 tons.
Tobacco exports rose 18.18 percent to 39,000 tons this year from 33,000 tons last year. The export value of tobacco increased 7.14 percent to $90 million from $84 million last year.
Sjarifudin said the value of plantation commodity exports was $5.1 billion this year, an increase of 11.3 percent from last year's figure of $4.86 billion.
"The export of fish and fish products was $2.05 billion this year, an increase of 9.3 percent from $1.89 billion last year," he said.
Drought
Sjarifudin said this year's severe drought, caused by the El Nio weather phenomenon, had damaged 426,150 hectares and resulted in a decrease in crops and plantation production, fisheries and farm output by about 10 percent to 30 percent.
"The drought also caused the delay of harvests by about two months," he said.
He also said this year's forest fires, which ravaged more than 165,000 hectares of forest, had also razed about 119,877 hectares of agricultural areas, including 95,875 hectares of plantations. (gis)
Table: Production of Indonesia's major agriculture commodities
No. Commodities 1996 1997 Growth (%) 1998-E (000 tons)
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1. Rice 51,101 49,135 -3.85 53,243
2. Corn 9,307 9,182 -1.34 9,611
3. Soybean 1,517 1,459 -3.82 2,095
4. Rubber 1,613 1,654 2.54 1,641
5. Coconut 2,719 2,829 4.05 2,817
6. Crude Palm Oil 4,960 5,609 13.08 6,377
7. Coffee 479 486 1.46 465
8. Tea 159 162 1.89 152
9. Pepper 63 63 0.00 52
10. Clove 94 99 5,32 83
11. Cocoa 318 333 4.72 332
12. Sugarcane 2,076 2,194 5,68 2,367
13. Tobacco 140 140 0.00 139
14. Salt Fishery 3,503 3,728 6.42 3,966
15. Meat 1,632 1,749 7.17 192