The export price of Indonesias rubber, SIR20, continued to fall to as low as US$1.886 per kilogram at the Singapore Bourse on Jan. 30 for Februarys shipment.
Executive secretary of the the North Sumatra branch of the Indonesian Association of Rubber Companies (Gapkindo) Sumut, Edy Irwansyah, attributed the decline to Chinese new year on Jan. 31.
Indications that the price is on the decline has been obvious over the past few weeks with demand from China, the main consumer is declining, Edy said here on Thursday.
On Jan. 27 , 2014, the price was US$1.971 per kg for Februarys shipment, Edy said, adding the price fall apparently continued until the close of the Singapore market on Jan. 30.
The price for March shipment, however, was still higher at US$1.938 dolar per kg and the price for July shipment is US$1.985.
“The prices would certainly hurt Indonesia badly in foreign exchange earning from rubber exports,” he said.
North Sumatras export earning from rubber would fall again in 2014 compared with 2013 as the price at the start of the year was low, he said.
Last year in the same month the selling price was US$2.882 per kg.
“The condition calls for consistency in export retention to prevent further fall in price,” Edy said.
He said the price fall was caused by weak demand from major consumers mainly China amid oversupply.
Demand from China is feared to shrink further as that country is still beset by economic slowdown.
North Sumatra economic observer Wahyu Ario Pratomo said the government needs to seriously address the condition to prevent further decline in rubber price.
Wahyu suggested cooperation with other major rubber producers in export retention.
He said the government also needs to help farmer cope with their problem as a result of the weak demand for rubber.
“The government should do something to prevent the farmers from changing their crop,” he said.
Indonesia is the worlds second largest producer of natural rubber and North Sumatra is the countrys largest producing province.
Source: Antara News
Published: 30 Jan 2014