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ndonesia's rubber businesses are eyeing a boost in sales and exports next year as the global automotive industry, one of the sectors that the rubber industry relies on, has begun recovering after hit hard by the global economic downturn.

Another factor has been that the rupiah has held up well against the US dollar, boosting hopes for a stronger rubber price, Indonesian Rubber Association (Gapkindo) chairman Asril Sutan Sani said during a press conference on Tuesday.

"Indonesia's rubber industry relies on exports a lot, mostly to supply the raw materials needed for automotive tires.

"As some automotive producers have begun recovering, that will be good news for us," he said.

About 80 percent of Indonesia's natural rubber production is exported, the rest being retained to meet domestic demand.

According to data collected by the Gapkindo, the price of type TSR-20 rubber stood at US$2.74 per kilogram as of December, about 25 percent higher than in October.

In the early months of 2009, the price of rubber stood at below $2 per kilogram.

This year's rubber exports by Indonesia, Malaysia and Thailand - the world's three largest rubber producers with about 70 percent of the world's total production of natural rubber - had been suffering declines in output and sales due to the continuing slump in demand as part of the global downturn.

Bloomberg previously reported that the International Tripartite Rubber Council (ITRC), comprising the three countries, had previously decided to cut their rubber exports by 700,000 tons this year as the global economic downturn had hit demand.

The world's total production of natural rubber last year stood at around 10 million tons and of synthetic rubber at around 14 million tons. About 30 percent of global natural rubber production comes from Indonesia.

Gapkindo predicts that Indonesia's natural rubber exports this year will fall by 8.7 percent to about 2.1 million tons from last year's 2.3 million tons, while domestic sales are predicted to drop by 6.04 percent to 389,000 tons from 414,000 tons last year.

Asril said that export performance had started to slightly rebound in the third quarter, with a monthly export increase of about 25 percent, helping the sector to avoid suffering further falls on the lines it had experienced during the first two quarters.

During the January-August period exports declined by about 20 percent compared to the same period last year.

Natural rubber production, however, did not drop pro rata to the fall in exports, falling by only about 6 percent, compared to the same period last year.

Until the end of 2009, Gapkindo predicts that natural rubber production results will end up at about 2.6 million tons, 5.71 percent down from last year's 2.75 million tons.