Rubber output this year in Indonesia, the world’s second-biggest producer, is likely to be around 5 percent below a forecast in January to stand flat with 2011 after heavy rains, a senior official at the Indonesian Rubber Association said on Wednesday.
In January, the group forecast Indonesia’s rubber output would rise 6 percent this year to 3.27 million tonnes as production kicked in from areas replanted around five years ago.
“There was plenty of rain in the first quarter, so production is likely to fall,” said Asril Sutan Amir, chair of the group known as Gapkindo, which groups 161 companies ranging from plantations to processors, exporters and traders, according to its website.
“Production is more or less the same as last year, or unchanged.”
Physical prices hit a lifetime high at $6.40 a kilogram in February 2011 before slipping to around $3.60 on concerns about slowing demand in China, a leading buyer of Indonesian rubber. Tokyo rubber futures hit multi-month lows la s t week on uncertainty over the debt crisis in Europe.
Thailand, Indonesia and Malaysia produce 70 percent of the world’s natural rubber.
Amir also said that SIR20 rubber prices were likely to trade above $3 a kilogram if crude oil prices can stay above $80 a barrel