RI rubber exports seen to fall 10%

Dow Jones, Singapore

Indonesia's natural rubber exports in 2001 are estimated to fall 10 percent to 1.24 million metric tons due to lower consumption in major Western markets especially after the Sept. 11 terror attacks in the U.S., a top rubber official told Dow Jones Newswires Wednesday.

Indonesia's rubber exports in 2002 are also likely to match this year's estimated level, said Suharto Honggokusumo, executive director of the Rubber Association of Indonesia, or Gapkindo.

"Exports are going to be lower because consumption in the U.S. has slowed down after the attacks. We heard that U.S. consumption could be reduced by 15 percent," said Suharto.

The terrorist attacks in the U.S. have damped the global economic outlook, with no recovery in auto production in sight after major auto makers revised down output to match lower consumer demand.

Indonesia, the world's second largest rubber producer after Thailand, exported 1.38 million tons of rubber in 2000. The U.S. takes up around 60 percent of total Indonesian rubber exports.

In the first half of 2001, Indonesia's rubber exports fell 0.73 percent on year to around 651,519 metric tons, from around 656,309 tons in the same period last year.

Suharto said the 2002 export forecast takes into consideration the plan by Thailand, Indonesia and Malaysia to cut exports by 10 percent next year to help shore up natural rubber prices at 30- year lows.

Low rubber prices are forcing Gapkindo to revise its forecast of Indonesia's rubber production in 2001.

Suharto said production this year is likely to fall 10 percent to 1.41 million tons from 1.567 million tons in 2000.

He said he can't give a forecast for 2002's output as the market needs to see how another plan by Thailand, Indonesia and Malaysia to cut output by 4 percent works out.