Luhut sees rubber price hike

Luhut sees rubber price hike

SINGAPORE (Dow Jones): Indonesia's Industry and Trade Minister Luhut Panjaitan said Friday he hopes rubber prices will increase to 60 U.S. cents a kilogram on an output cut.

The cut in rubber production is one of the primary issues to be discussed at a ministerial meeting in Bangkok involving Thailand, Indonesian and Malaysia. The July 5 meeting aims to finalize details aimed at shoring up physical rubber prices.

Luhut admitted that "the price won't automatically increase...it will take time to reach 60 cents (a kilogram)." He didn't say when rubber prices could reach that level.

Luhut said last week Indonesia is planning to reduce rubber production to help prop up global rubber prices. He gave no details of the plan then.

Friday, he said the government hasn't decided how much production to cut. The issue will be discussed at a senior officials meeting with Thailand and Malaysia July 3-4, prior to the ministerial meeting, he said.

Another primary issue at the ministerial meeting is how the world's top three rubber producers can increase the price of rubber currently at 30-year lows.

The July shipment of standard Indonesian rubber 20 grade is currently quoted around 49.6 U.S. cents/kg, compared with 62.3 cents/kg same time last year.