Indonesia plans to conduct moratorium on rubber exports

Indonesian rubber board (Karindo) plans to temporarily stop shipping rubber overseas should the commodity prices keep falling to below 3 U.S. dollar per one kilogram to boost prices and prevent cancellation of purchasing- contract commitments done unilaterally by buyers, Aziz Pane, chairman of the board has said.

The plan was made as the weakening global economy and floods in Thailand had trimmed demands of the commodity that lead to downward pressures on the prices and led to cancellation of some contracts.

The chairman quoted by Bisnis Indonesia as saying on Thursday that the three world's largest rubber producer countries grouped in International Tripartite Rubber Council (ITRC), Indonesia, Malaysia and Thailand may delay tapping, decrease exports and boost stockpile so as to keep prices more than 3.5 U.S. dollar per one kilogram. "We predict rubber prices are going to keep declining due to the global crisis and the flood in Thailand as well,"he said.

Rubber price reached 4.5 U.S. dollar to 4.6 U.S. dollar per one kilogram at the beginning of 2011, said Aziz.

He said that currently the demand of rubber from Japan, China, South Korea and Thailand had declined.

Although the risks of the crisis continue, the chairman warned the buyers not to unilaterally abort purchasing contracts.

Indonesia produces 2.59 million tons rubber in 2010 and is forecast to produce 2.97 million ton in 2011, according to agriculture ministry.

The country produce 2.44 million ton of the commodity in 2009, 2.75 million ton in 2008, 2.76 million ton in 2007, 2.64 million ton in 2006 and 2.27 million ton in 2005, it said.

Source: Xinhua News