Indonesia’s 2012 Rubber Production Growth May Slow on Weather

Natural-rubber production in Indonesia, the second-largest grower, may increase at a slower pace this year as a moderate La Nina potentially disrupts tapping even as more trees are maturing, an industry group said.

Output may rise 6.5 percent to 3.3 million metric tons this year after gaining 12 percent to 3.1 million tons last year, said Suharto Honggokusumo, executive director at the Rubber Association of Indonesia.

Exports may gain to 2.8 million tons from 2.6 million tons, supported by demand from tire makers in the U.S., Japan and China, he said by telephone from Jakarta today.

Rubber plunged 36 percent last year on concern the European sovereign-debt crisis hurt demand. June-delivery futures rose 0.75 percent to 268.2 yen per kilogram ($3,490 a ton) on the Tokyo Commodity Exchange at 2 p.m. Jakarta time.

“Rubber trees that were replanted in 2007 and 2008 will start producing this year,” Honggokusumo said. “Demand remains good, with consumption from Europe expected to improve in the second half.”

Output from the world’s biggest growers, which represent 92 percent of global supply, may rise 3.1 percent to 10.42 million tons this year, the Association of Natural Rubber Producing Countries said yesterday. Last year, output increased 6.4 percent to 10.1 million tons, it said, a faster pace than its November forecast of 5.6 percent.

Source: http://www.bloomberg.com/news/2012-01-05/indonesia-s-2012-rubber-production-growth-may-slow-on-weather.html