Largest natural rubber producer Indonesia is grappling with the low price of rubber. Rubber used to be US$4.61 per kg in 2011, but has now decreased to US$1.5 per kg.
Trade Minister Rachmat Gobel said the government would push for the increased use domestic national rubber through joint endeavours involving the Industry Ministry, the Public Works and Public Housing Ministry and the Agency for the Assessment and Application of Technology (BPPT).
Indonesia is presently the largest natural rubber producer with total production of 3.1 million tons and US$4.7 billion in foreign exchange revenue in 2014. The minister said domestic industries only absorbed 18 percent of the huge rubber production, a figure relatively low compared to other countries, such as Malaysia, which saw 40 percent. Rachmat said the low figure had resulted in plunging rubber prices due to oversupplies. Rachmat said he would jack up domestic rubber consumption by 100,000 tons per year. “For 2015, the minimum target is 700,000 tons.” He explained the government would draw on natural rubber to support the country’s infrastructure projects, and that the use of domestic rubber would be maximized using the budget allocation of Rp 118 trillion from the state budget. Separately, Taufik Widjojono, the interim secretary general of the Public Works and Public Housing Ministry, said some 60,000-80,000 tons of rubber could be absorbed annually to be mixed with asphalt, explaining that this sort of asphalt was more durable. “It’s more elastic and the pores are smaller, so it’s more resistant to water,” he said