Rubber association predicts 5% growth in production

JAKARTA (JP): The Association of Indonesian Rubber Producers (Gapkindo) predicts the country's rubber production will grow by 5 percent this year to 1.83 million tons from 1.75 million tons last year thanks to the harvest of new trees.

Gapkindo executive director Suharto Honggokusumo told The Jakarta Post on Wednesday, rubber trees which were planted several years ago, were expected to produce their first harvest this year.

"We'll start taking yields from our new rubber trees this year," Suharto said.

The country's rubber output rose slightly last year to 1.75 million tons from 1.71 million tons in the previous year.

Suharto said that the El Nino climatic phenomenon, which was expected to occur in the middle of this year, could further boost the country's rubber output as the dry weather, caused by the El Nino effect, would prolong the harvest season for farmers.

"If it comes (El Nino), the rise in rubber output would probably be higher," he said.

Experts have said El Nino, which was blamed for severe droughts across Indonesia and the region in 1997, was likely to return in the middle or at the end of this year, albeit in a milder form compared to 1997.

Suharto, however, warned although El Nino would help boost the country's rubber output this year, output could plunge next year as prolonged drought might reduce yields of rubber trees.

Indonesia is one of the three biggest rubber exporting countries together with Malaysia and Thailand. The three countries account for about 80 percent of the world's rubber production.

Around 90 percent of Indonesia's rubber production is targeted for export, while the remaining 10 percent goes to local industries.

Suharto predicted the country's exports would remain stable in terms of volume this year, but he could not estimate the total value of the exports, citing the fluctuating rubber price.

He said the rubber price on the international market was very sensitive to the fluctuation in the currency market.

"Our exports will reach 1.4 million tons this year. But, we cannot predict the total value," Suharto said.

The country's rubber exports stood at 1.38 million tons valued at $888.62 million last year, as against 1.49 million tons valued at $849.10 million in the previous year.

Indonesia exports its rubber to the United States, Japan, Singapore and European countries with the U.S. absorbing more than 40 percent of the exports.

Suharto said the price of rubber was at 51.5 cents per kilogram at present, down from 62 cents last year.

In 1999, the price hovered at 49 cents per kilogram, according to Suharto. (03)