Rubber producers from Thailand, Malaysia, and Indonesia will meet on the December 16 to discuss ways to improve current prices, including potentially curbing exports.
Representatives from the three countries which comprise the International Tripartite Rubber Council (ITRC) will meet in Putrajaya, Malaysia, according to Iman Pambagyo, Director General of International Trade Negotiation at Indonesia’s Trade Ministry.
“We will focus on discussing issues that has kept prices of natural rubber low,” he said.
ITRC will be looking at two possible measures to boost prices, including reducing exports and tree replanting which will automatically reduce supply.
Benchmark rubber futures on the Tokyo Commodity Exchange hit a 27-month low last month following concerns over global oversupply.
“The issue is how all the members will comply with this,” Pambagyo said.
“The Indonesian Trade Minister has strongly conveyed this in the previous meeting, we have to maintain discipline.”
The Indonesian government are planning to launch a rubber replanting program this month, with the pilot project covering up to 6,000 hectares of land in Sumatra. The government aims to replant 700,000 hectares of rubber farms by 2025.
The group has also invited Vietnam to join discussions, given the country’s rising supply to the global rubber market.
ITRC will also consider using more rubber in roads and high-rise construction projects to absorb excess supply, he added.
Indonesian President Joko Widodo last week ordered the country’s Public Work and Housing Ministry to buy rubber directly from farmers to lift local prices.