Indonesia’s 2012 rubber production growth may slow on weather

INDONESIA – Natural-rubber production in Indonesia, the second-largest grower, may increase at a slower pace this year as a moderate La Nina potentially disrupts tapping even as more trees are maturing, an industry group said.

Output may rise 6.5 % to 3.3 million MT this year after gaining 12 % to 3.1 million tonnes last year, said Suharto Honggokusumo, executive director at the Rubber Association of Indonesia.

Exports may gain to 2.8 million tonnes from 2.6 million tonnes, supported by demand from tyre makers in the U.S., Japan and China, he said.

Rubber plunged 36 % last year on concern the European sovereign-debt crisis hurt demand. June-delivery futures rose 0.75 % to 268.2 yen/kg (US$3,490/tonne) on the Tokyo Commodity Exchange at 2 p.m. Jakarta time.

“Rubber trees that were replanted in 2007 and 2008 will start producing this year,” Honggokusumo said. “Demand remains good, with consumption from Europe expected to improve in the second half.”

Output from the world’s biggest growers, which represent 92 % of global supply, may rise 3.1 % to 10.42 million tonnes this year, the Association of Natural Rubber Producing Countries said yesterday. Last year, output increased 6.4 % to 10.1 million tonnes, it said, a faster pace than its November forecast of 5.6 %.

Source: Bloomberg