INDONESIA: N. Sumatra`s rubber production predicted to decline

North Sumatra’s production of natural rubber is predicted to decline to around 450,000 tons this year from 465,000 tons in 2014.

Executive Secretary of the North Sumatra branch of the Indonesian Association of Rubber Companies (Gapkindo) Eddy Irwansyah attributed the decline to falling price of the commodity in the international market. Many farmers even cut their rubber trees to replace their crops with ones more profitable, Eddy said in Medan (capital of the North Sumatra province) on 12 Dec. 2015. He said the price of natural rubber in the international market was only USD 1.17 per kilogram and around Rp 13,000 per kilograms at processing factory. Eddy predicted the rubber price would shrink further to follow the oil price fall.

Gapkindo said with the trend, farmers would have no interest to grow rubber. "As a result the country’s rubber production is feared to shrink again in 2016," Eddy said.

Currently, North Sumatra contributed 33 % to the country’s total production of natural rubber. North Sumatra is the country’s second largest producer of natural rubber after South Sumatra.

Secretary of the Indonesian businessmen association (Apindo) of North Sumatra Parlindungan Purba said falling prices of rubber resulted in a decline of the provinces’ export earning so far this year.

Rubber is a major export commodity from North Sumatra.

Until the third quarter of 2015, North Sumatra’s export earnings dropped 18.31 % on year--from USD 7.099 billion in the first nine months of 2014 to USD 5.799 billion in the same period this year.

"Global crisis has bad impact on the North Sumatra’s export performance," Parlindungan said.

Source: Antara News Agency, Jakarta; 12 Dec 2015
(Syed Rashid Ali, Karachi, Pakistan)