Demand for North Sumatra`s rubber shrinking
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North Sumatras exports of natural rubber has continued to shrink, down 8.23 percent in volume to 137,826 tons in the first four months of the year from 150,194 tons in the same period in 2015.
“The decline in exports was on weak demand and as a result of an agreement by worlds largest producers to cut exports,” executive director of the North Sumatra branch of the Indonesian Association of Rubber Companies (Gapkindo) Edy Irwansyah said here on Sunday.
Thailand, Indonesia and Malaysia which are grouped in the rubber cartel International Tripartite Rubber Council (ITRC), had decided to cut exports in a bid to drive up the commodity price.
The three Asean countries, which account for around 80 percent of the worlds production of natural rubber decided to cut exports by 615,000 tons to be shared proportionally by the three ASEAN countries. Indonesia is to cut exports by 238,736 tons.
The ITRC said it was optimistic the export cuts would drive rubber market to recovery after six years of being in deep slump.
The price of natural rubber has remained low to follow the oil price fall.
Edy 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 Junes delivery.
The price of latex in North Sumatra has also dropped to around Rp13,477 per kg Rp13,477 – Rp14,201 per kg.
“The price of the commodity on May 13 was US$1.4 per kg for delivery in July down from US$1.417 for Junes delivery.”
However, reports said earlier that the price of rubber in othyer areas of the country had been picking up .
In Lebak regency of Banten , the price rose in the fourth week of April reaching Rp21,500 poer kg of slab.
“I think the price rise would encourage the rubber farmers,” said Rulyy Yanrila, head of the marketing section of the district Forestry and Plantation Office.
The increase in price would at least help cover the production cost, Rulyy Yanrila said .
Many rubber farmers have been on the brink of bankruptcy after years of slump, he said, adding some farmers already stopped tapping as the result was not worth the work.
Jayadi (55),a rubber farmer in the village of Leuwidamar, said rubber production declined over the past several weeks as most of the rubber trees have been too old and on poor maintenance.
In Kalimantan, Chairman of the South and Central Kalimantan branch of the Indonesian Association of Rubber Companies (Gapkindo)Andreas Winata said the price of natural rubber from that region has increased to Rp16,000 per kilogram from Rp12,000 earlier.
Andreas said the cut in exports apparently has caused panic in international market on shortage in supply, resulting in surge in price. In addition, supplies from other countries also declined on long drought, he said.
Questions & Answers
Q.What was the volume of natural rubber exports from North Sumatra in the first four months of this year, and how does this compare to the same period in 2015?
What was the volume of natural rubber exports from North Sumatra in the first four months of this year, and how does this compare to the same period in 2015?
North Sumatra exported 137,826 tons of natural rubber in the first four months of the year. This represents an 8.23 percent decrease in volume compared to the 150,194 tons exported in the same period of 2015.
Q.Which countries are part of the International Tripartite Rubber Council (ITRC) and what was their agreement regarding rubber exports?
Which countries are part of the International Tripartite Rubber Council (ITRC) and what was their agreement regarding rubber exports?
Thailand, Indonesia, and Malaysia are grouped in the ITRC. They agreed to cut exports by 615,000 tons in total, shared proportionally, in an effort to increase the commodity price. Indonesia's individual cut is 238,736 tons.
Q.What were the reported prices for natural rubber per kilogram for July delivery and for June delivery?
What were the reported prices for natural rubber per kilogram for July delivery and for June delivery?
The price of natural rubber was US$1.4 per kilogram for July delivery as of May 13. This was slightly down from US$1.417 per kilogram for June delivery, indicating a slight decline.
Q.Are rubber prices increasing in all regions of Indonesia, or are there regional differences mentioned?
Are rubber prices increasing in all regions of Indonesia, or are there regional differences mentioned?
While latex prices in North Sumatra dropped, reports indicate rubber prices were picking up in other areas. Prices rose to Rp21,500 per kg in Lebak regency and Rp16,000 per kg in South and Central Kalimantan from an earlier Rp12,000.
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