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Rubber producers remain upbeat despite global crisis
Rubber exports may hit US$6 billion by the end of this year, an association says, underlining a positive outlook for the industry despite a one-month fall in exports in October reflecting the global economic downturn
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Rubber exports may hit US$6 billion by the end of this year, an association says, underlining a positive outlook for the industry despite a one-month fall in exports in October reflecting the global economic downturn.
Executive director of the Indonesian Rubber Association (Gapkindo) Suharto Honggokusumo said Tuesday this year's average rubber price, which was still higher than that in the previous year, would help keep the volume of rubber exports above the record 2007 figures.
"The rubber price is $2.66 per kilogram on average as of Nov. 27 this year, still above the 2007 average price of $2.15 a kilogram," he said.
"Therefore, we believe our exports will still be able to reach $6 billion this year although the price has fallen from its peak on June 27 and demand has significantly dropped due to the global financial crisis," he added.
With the $2.15 per kilogram average price in 2007 rubber exports still reached $4.8 billion.
Following the trend in global crude oil prices, rubber peaked at $3.3 per kilogram on June 27 before slumping to its lowest point at $1.53 per kilogram on Sept. 16, and further declining to $1.2 per kilogram on Tuesday.
On Monday, the Central Statistics Agency (BPS) showed that exports of rubber and rubber-made products stood at $597.3 million in October, down 22.4 percent from September's $769.8 million due to the global slowdown.
Rubber is mostly used in the tire industry.
The Indonesian tire industry, estimated to consume 169,000 tons of natural rubber and 126,000 tons of synthetic rubber by the end of this year, is forecasting to post $1.1 billion in exports by the end of this year, according to Indonesian Tire Producers Association (APBI) chairman Azis Pane.
In a bid to help bolster the rubber price, Indonesia, Malaysia and Thailand -- which together produce 70 percent of global natural rubber production -- jointly agreed last month to cut rubber output by 210,000 tons next year by replanting trees.
Indonesia is the world's second biggest rubber producer after Thailand, with rubber production amounting to 2.7 million tons last year.
Suharto also said he was convinced that by volume, rubber exports would still grow this year by 3 percent on the 2.4 million tons shipped last year.
