Indonesian rubber output seen stagnant

JAKARTA (JP): Indonesia is keeping rubber production in 2000 at last year's level of about 1.6 million metric tons because of a glut in the world market, the Indonesian Rubber Producers Association (Gapkindo) said on Monday.

Gapkindo vice chairman Asril Sutan Amir blamed Thailand's huge production, due to its high yield, for the current market condition, including the low prices.

With financial and technical support from Japan, a hectare of rubber trees in Thailand can yield more than 1,000 kilograms a year, Asril told reporters.

This is in comparison to Indonesia's yield of between 400 and 700 kg/hectare from the 3.2 million hectares of rubber plantations. Sumatra accounts for 65 percent of Indonesia's rubber output, followed by Kalimantan with 24 percent.

Moreover, Indonesia's rubber production has not recovered from the impact of the long dry season in 1998, Asril said.

Thailand is the world's largest rubber producer while Indonesia ranks second, followed by Malaysia.

The market glut followed the dissolution of the International Natural Rubber Organization (INRO) in October 1999 after Thailand and Malaysia decided to quit the group.

"Last week, the price increased to 75 U.S. cents per kilogram, but it has since fallen to below 70 cents, thanks to Thailand's decision to release its stock," Gapkindo executive director Suharto Honggokusumo said.

Suharto said that by limiting production, Indonesia hoped the world market would reach an equilibrium between demand and supply in a few months, and that the price would steadily increase to $1 a kilogram by July. (07)