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Low prices prompt rubber farmers to switch to other crops
Indonesia, the second-largest natural rubber producer in the world, is struggling to develop its rubber processing industry and diversify rubber products amid a fall in global commodity prices due to a decline in demand.
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A worker taps a rubber tree in the Jawi Jawi rubber plantation area, Bulukumpa district, Bulukumba regency, South Sulawesi in the file photo. (Antara/Abriawan Abhe)
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he Indonesian Tire Producers Association (APBI) has called on the government to promote the development of a rubber-based fuel to revive rubber demand and boost prices, and ultimately to prevent rubber farmers from switching to other crops.
The association’s chairman, Aziz Zane, said the continued decline in rubber prices because of weak demand from the global market and a plant disease outbreak, has turned rubber plantations economically unviable. As a result, many farmers have abandoned their rubber plantations and turned to other crops that offer better earnings, he added.
"We are afraid that the rubber [plantations] will be gone," Aziz said on the sidelines of a focus group discussion on the development of a rubber-based biofuel in Jakarta on Monday.
Indonesia, the second-largest natural rubber producer in the world, is struggling to develop its rubber processing industry and diversify rubber products amid a fall in global commodity prices due to a decline in demand. Efforts to increase demand in the domestic market have not gone as planned. Local tire manufacturers remain the largest buyers of rubber in the local market.
Out of Indonesia’s total rubber production of 3.55 million tons last year, only about 17 percent or 600,000 tons were sold in the local market. About 75 percent or 450,000 tons were bought by tire producers.
"The tire industry needs rubber. Moreover, Indonesian rubber has the best quality," Aziz said.
As of July last year, a plant disease outbreak caused by the Pestalotiopsis sp fungus hit 320,000-hectares of rubber plantation in six provinces, namely North Sumatra, South Sumatra, Bangka Belitung, West Kalimantan, Central Kalimantan and East Kalimantan, according to Coordinating Economic Minister Darmin Nasution as quoted by kompas.com.
