Indonesia, along with two other members of the International Tripartite Rubber Council (ITRC) — Malaysia and Thailand – will cut the export of natural rubber in an attempt to stabilize the commodity’s global price.
Starting April 1, Indonesia will cut rubber exports by 98,160 tons over the next four months, while Malaysia will cut the export by 15,600 tons and Thailand, the largest rubber producer, will cut 126,240 tons starting May 20.
The Trade Ministry’s head of trade assessment and development, Kasan Muhri, said the move was part of the ITRC’s sixth Agreed Export Tonnage Scheme (AETS), which aimed for a combined reduction of rubber exports of 240,000 tons.
“We will continue to monitor rubber prices to ensure better profit for rubber farmers,” Kasan told a press briefing on Monday. “Meanwhile, exporters from the Indonesian Rubber Association (Gapkindo) will help oversee the export cuts.”
Global rubber price is steadying at around US$1.4 per kilogram after it dived to below $1.2 late last year. With the AETS, the price of rubber is expected to increase to more than $1.5 per kilogram, with the possibility of reaching $2 per kilogram, Kasan said.
The Office of the Coordinating Economic Minister’s international economic cooperation undersecretary, Rizal Affandi Lukman, said the government would expand the domestic market of natural rubber, such as by using it as mix material for road construction and making retread tires.
“We believe domestic demand will be capable of absorbing the rubber,” Rizal said in a press briefing.