Indonesia’s rubber business estimates rubber production will rise by 8 percent to 3.08 million tons this year from around 2.85 million tons last year.
Indonesian Rubber Association (Gapkindo) executive director Suharto Honggokusumo said Thursday that production would be boosted by replanting at a number of revitalized plantations, and tree cloning.
“However, the estimate is still subject to weather. If there is excessive rainfall in plantation areas, the production will remain the same as last year’s 2.85 million tons,” he said, adding that starting from May supply would be good provided there were no weather irregularities.
Most of Indonesia’s rubber plantations — 86 percent of which are smallholder plantations and 14 percent private and state-owned plantations — are located in Sumatra, Java and Kalimantan.
Gapkindo predicted that out of the 3.08 million tons of the country’s total output estimated this year, 84.4 percent would be exported.
Indonesia, currently the world’s second-largest rubber producer, annually contributes around 30 percent of the world’s demand. Its exports mainly go to the United States, Japan, China, Singapore, South Korea, Germany and Canada.
“Exports will grow by 8 percent to 2.6 million tons in 2011 from 2.4 million tons last year, while domestic demand will also rise by 7 percent to 480,000 tons from 450,000 tons,” Suharto said, adding that domestic demand as well as global demand for natural rubber would grow on the back of an improving global economy.
He said that this global economic recovery would encourage the growth of automotive industries, which consumed 70 percent of the world’s demand for rubber.
The International Rubber Study Group (IRSG) forecast that this year’s global demand for rubber would reach 11.15 million tons with a deficit of 180,000 tons, less than last year’s deficit of 446,000 tons.
Suharto forecast that rubber prices would likely surge this year due to supply shortages.
“The price from January until April will be possibly be around US$5 per kilogram amid tight supply,” he said. Last year the average price was $3.38 per kilogram.
Meanwhile, Bloomberg reported from Tokyo that rubber extended its rally to a record for a third day after data showed improvement in the US economy, boosting expectations demand would expand for the commodity used in tires. The cash price in Thailand, the largest exporter, climbed to an all-time high.
June-delivery rubber gained as much as 2.9 percent to ¥440.5 a kilogram ($5,301 a metric ton) before settling at ¥440.2 on the Tokyo Commodity Exchange. The most-active contract has increased 6.3 percent this week, extending last year’s advance of 50 percent.
Japanese stocks climbed and the yen weakened against the dollar after higher-than-estimated growth in US payrolls and service industries bolstered optimism in the world’s largest economy.
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