TEMPO.CO, Medan-North Sumatra's 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 Sunday, May 15, 2016.
Thailand, Indonesia, and Malaysia which are grouped in the rubber cartel International Tripartite Rubber Council (ITRC), have 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 world's 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 recover after six years of being in deep slump.
The price of natural rubber has remained low following 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 June's delivery.
The price of latex in North Sumatra has also dropped to around Rp13,477 - Rp14,201 per kg.
However, reports said earlier that the price of rubber in othyer areas of the country had been picking up .
ANTARA
