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Growth in rubber exports to slow down: Association
With demand slowing down in line with the global economic downturn, Indonesian rubber exporters have revised downwards the export growth target for this year to 4 percent
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With demand slowing down in line with the global economic downturn, Indonesian rubber exporters have revised downwards the export growth target for this year to 4 percent.
The Association of Indonesian Rubber Companies (Gapkindo) said Friday that full-year rubber exports had orginally been projected to reach 2,548,000 tons, representing a 7 percent rise from 2.4 million tons in 2007.
Suharto Honggokusumo, Gapkindo executive director, said the global financial meltdown had caused importers in several countries to ask for rescheduling of rubber shipments.
"Some buyers from the United States, for instance, have asked us to reschedule the shipments initially intended for December, to January and February next year," he told a media briefing.
The global turmoil has delayed and sometimes derailed demand for rubber from the world's major importers, such as the U.S., Japan and China.
"With demand being weak alongside relatively stable rubber stocks, I'm afraid the price may go down, with a further negative impact on the global rubber trade."
The prices of rubber in the global market have already gone down since June, when it reached its 2008 peak of US$3.29 per kilo. But the pace of the decline accelerated sharply in September when signs of global financial turbulence were more marked.
On Oct. 16, rubber was traded at around $1.53 per kilo.
Suharto said that Gapkindo had urged farmers to cut their rubber production to anticipate slowing demand. "Besides, we are hoping that domestic rubber consumption will increase so that we will not rely too heavily on exports."
In 2007, domestic consumption absorbed about 319,000 tons of rubber, as compared to exports of 2.4 million tons.
Gapkindo expects this year's domestic consumption to increase by 10 percent to 15 percent compared to last year.
Sultoni Arifin, Gapkindo assistant executive director, said Indonesia would join an emergency meeting with the governments of Malaysia and Thailand on Oct.29 and 30 in Bangkok.
"The three major exporters, which are grouped under the International Tripartite Rubber Council (ITRC), will search for means to cope with the sluggish rubber market," he said.
This year, total production of natural rubber is expected to reach 2.8 million tons, up from 2.76 million tons in 2007, making Indonesia the world's second largest producer after Thailand. (ewd)
