Indonesia's rubber output drops by five percent

JAKARTA (JP): Indonesia's natural rubber production is estimated to drop to 1.31 million tons this year but, according to the Indonesian Rubber Association (Gapkindo), will most likely recover next year.

O.K. Cornel, the chairman of the association, said here yesterday that the drop in the rubber production from its 1993 level of 1.36 million tons was caused mainly by a severe drought that lasted for over six months in most parts of the country.

Indonesia is the world's second largest producer of natural rubber after Thailand and one notch above third-ranked Malaysia. The annual production of rubber in Indonesia grew by a mere three to five percent in the last five years.

Cornel said that the association, grouping natural rubber processors and producers, would launch a campaign on replantation in January in an effort to boost the country's natural rubber output.

He said that the replanting program will initially be directed at farmers, who control over 70 percent of the nearly 3.22 million hectares of rubber plantation areas in the country.

Expansion

In addition to replacing old rubber trees, farmers would also be encouraged to open up new plantation areas, he said, adding that through this campaign, Indonesia is projected to remain a major natural rubber producer over the next five years.

"It is now a good moment for farmers to carry out an expansion program," he said of the diminished profits that farmers collected due to the sharp increase in rubber prices the second semester of this year.

He said farmers would be encouraged to set aside portions of their money to expand their plantations and that the association would help them to procure rubber tree seeds from qualified seedling institutions.

World rubber prices have increased as demand continues to outstrip declining supply, an effect that will likely have an impact on the economic recoveries of major industrialized countries.

The demand for Indonesian rubber of the SIR grade, for example, sharply increased which, in turn, pushed up the price early this month to $1.52 per kilogram, an increase of more than 100 percent since July.

Indonesia presently exports around 90 percent of its rubber production. It will have to reduce this figure in the future to meet the growing demand exerted by the country's automotive industry. (hen)