North Sumatra’s exports of natural rubber have continued to decrease. It is down 8.23% in volume to 137,826 tonnes in the first four months of 2016 from 150,194 tonnes in the same period in 2015.
“The decline in exports was on weak demand and as a result of an agreement by world’s largest producers to cut exports,” executive director of the North Sumatra branch of the Indonesian Association of Rubber Companies (Gapkindo) EdyIrwansyah said Sunday, May 15.
Thailand, Indonesia, and Malaysia which are grouped in the rubber cartel International Tripartite Rubber Council (ITRC), have decided to cut exports in a bid to drive up the commodity price. The three Asean countries, which account for around 80% of the world’s production of natural rubber, decided to cut exports by 615,000 tonnes to be shared proportionally by the three ASEAN countries.
Indonesia is to cut exports by 238,736 tonnes. The ITRC said it was optimistic the export cuts would drive rubber market to recover after six years of being in deep slump.
The price of natural rubber has remained low following the oil price fall. EdyIrwansyah said the export volume would likely fall lower not only because of the ITRC agreement but also because of weaker demand. The price of the commodity on May 13 was US$1.4 per kg for delivery in July down from US$1.417 for June’s delivery. The price of latex in North Sumatra has also dropped to around Rp13,477 – Rp14,201 per kg.
However, reports said earlier that the price of rubber in other areas of the country had been picking up.
Source: Tempo