JAKARTA, Oct 16 (Reuters) – Indonesia plans to cut production of natural rubber output by 30 percent this year to lift slumping prices, Agriculture Minister Anton Apriyantono said on Thursday.
The minister said weakness in rubber prices would continue as the global economy slowed and dented demand from the automotive industry.
Natural rubber is used mostly to feed tyre industry.
“We have measures to pre-empt weakness in rubber prices by cutting production around 30 percent,” Apriyantono told reporters.
Planters, both smallholders farmers and rubber plantation companies, were being encouraged to reduce tapping frequency to once in three days from once in two days, he said.
Indonesia was expected to produce around 2.9 million tonnes of rubber this year, up from 2.75 million tonnes in 2007.
The country exported 2.41 million tonnes of natural rubber in 2007, up 4.78 percent from 2006, with the United States as the top buyer.
Tokyo rubber futures fell to a fresh three-year low on Thursday, losing 8.9 percent due to fears of weak demand for the industrial commodity, with defaults by Chinese buyers adding to the downward pressure.
The benchmark rubber contract on the Tokyo Commodity Exchange for March delivery <0#JRU:> fell 15.9 yen to end the morning session at 162.2 yen ($1.60) per kg, the lowest since August 2005.
The ministry was also proposing to scrap palm oil tax when crude palm oil prices hit $650-$750 a tonne, Apriyantono said.

Source:  Reuters

Comments are closed.