Indonesia produces massive amounts of crude palm oil (CPO), coal, nickel, natural rubber, copper and many other commodities. The reopening of the global economy in 2021 created huge demand for such commodities, and hence drove up the prices of most commodities.

For example, coal and CPO prices rose significantly by 109.2 percent year-to-date (ytd) and 21.0 percent ytd, respectively. As a result, Indonesia’s export performance reached record highs in October and November. Cumulatively, Indonesia’s export value grew an impressive 42.6 percent year-on-year (yoy) in the January-November period.

The natural rubber industry also benefited from the global economic reopening. The global reference price for TSR20 rubber on the Singapore Exchange (SGX) was US$1.7 per kilogram on Monday, an increase of 13.7 percent ytd.

However, rubber prices increased at a relatively lower rate compared to other Indonesian commodities. In a more detailed view, rubber prices moved sideways throughout 2021 in the range of $1.5 to $1.8.

Unlike other commodities, rubber failed to break its record price in 2021. So why did rubber price move differently compared to other commodities?

First, approximately 55 percent of the world’s rubber is absorbed by the automotive sector, especially in China, the United States and Japan. This is followed by the glove (19 percent) and footwear (11.15 percent) sectors.

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