Malaysia to invest in plantations in Indonesia

Malaysia to invest in plantations in Indonesia

KUALA LUMPUR (AFP): Malaysia, once the world's largest natural rubber producer, yesterday said it was no longer interested in expanding rubber cultivation and would instead invest in plantations in Indonesia.

"Rubber planting needs a lot of land, but its price could not be controlled and fluctuated according to the market situation," Prime Minister Mahathir Mohamad was quoted by Bernama news agency as saying in Jitra, in his northern homestate Kedah.

Malaysia, instead, planned to shift future investments in rubber and oil palm plantations in Indonesia, which still had vast land and enjoyed lower production cost because of cheaper labor, he said.

He said an acre (0.4 hectares) of land, if planted with rubber, could support a single farmer, whereas the same land deployed for industries could support up to 200 people.

Malaysia, which saw production shrink to 1.07 million tons last year from 1.66 million tons at its peak in 1988, is now the world's third largest natural rubber producer, after Thailand and Indonesia.

Thailand produced 1.5 million tons while Indonesia 1.3 million tons last year. The three producers account for 75 percent of the total world output.