Indonesia rubber output seen up 7% in 2013

Wednesday, 16 January 2013 00:10 - - {{hitsCtrl.values.hits}}

JAKARTA (Reuters): Indonesia’s 2013 rubber output will rise 7% on the year to 3.2 million tons due to higher yields, the rubber industry body in the world’s second-largest producer said on Friday, with exports seen little-changed at 2.7 million tons.

Rubber production in Indonesia last year was three million tons and exports were 2.8 million tons, Rusdan Dalimunthe, executive director at the Indonesian Rubber Association (Gapkindo) told Reuters.

The expected decline in exports will be driven by rising domestic demand from the tyre industry, Dalimunthe added.

“Although we predict our natural rubber output this year is increasing, a significant increase in domestic rubber consumption could reduce our dependency on the rubber export market amid weakening international rubber prices,” Dalimunthe said.

Gapkindo previously said 2012 output would fall by 10% on the year to 2.8 million tons due to dry weather conditions.

The new industry estimate for 2013 is above the Agriculture Ministry forecast of 2.77 million tons.

In an effort to support global rubber prices, Thailand, Indonesia and Malaysia agreed to cut down rubber trees and trim exports by 300,000 tons between October last year and March 2013.

Almost 90% of Indonesian rubber comes from small-scale farmers, with Sumatra province accounting for 70% of overall output.

The US is Indonesia’s biggest rubber buyer, taking about 20% of its exports, with China and Japan buying about 15% each.

Gapkindo encompasses 161 companies ranging from plantations to processors, exporters and traders.