RI plans to cut rubber production to lift prices

RI plans to cut rubber production to lift prices

Dow Jones, Singapore

Indonesia will ask its rubber farmers to shift to palm-oil planting so as to reduce world rubber supply and lift sagging world rubber prices, a senior government official said late Saturday.

Indonesian Industry and Trade Minister Rini Soewandi said this is in line with Indonesia's international commitment to cut rubber exports to prop up depressed world prices.

"We will ask farmers to convert rubber farms into palm-oil plantation," she said.

Soewandi declined to elaborate on this plan, saying that the details are still being ironed out.

Thailand, Indonesia and Malaysia - the world's biggest rubber producers and exporters - have pledged to cut rubber exports by 10 percent and output by four percent starting next year to shore up physical rubber prices.

These countries will hold a tripartite ministerial meeting in Bali, Indonesia, in December to finalize this plan.