In an attempt to revive rubber demand and boost prices, the Indonesian Tire Producers Association (APBI) has recently asked the government to promote the development of a rubber-based biofuel, to prevent rubber farmers from switching to other crops. Many farmers have abandoned their rubber plantations in light of the continued decline in rubber prices and a fungal plant disease outbreak – these farmers have turned to other crops, such as palm oil, that offer better earnings as rubber plantations remain economically unviable. APBI Chairman, Aziz Zane, is fearful that “the rubber [plantations] will be gone” because of the weak demand from the global market.
Indonesia may be the second-largest natural rubber producer (NR) in the world, but the country is struggling to develop and diversify its rubber processing industry. The Indonesian government is currently working on programmes that can absorb its surplus NR production, with a particular emphasis on the infrastructure sector.