Indonesia Rubber Group Says $4 Price Should Be Defended

The Rubber Association of Indonesia wants a price of $4 per kilogram defended and
urged its members not to sell in a panic after prices plunged.
Rubber is in short supply because of the wintering now in growing regions and the
potential demand from consumers and tire manufacturers is still strong because of
the economic recovery in the U.S. and growth in China, the association, also known
as Gapkindo, in a statement. Indonesia is the world’s second-largest producer.
The International Rubber Consortium Ltd., which comprises Thailand, Malaysia and
Indonesia, will probably delay exports to counter a price slump as demand outpaces
supply during the low production period, Yium Tavarolit, the acting chief executive
officer said today (Mar 17). Rubber futures have plunged 26 percent from a record
535.7 yen a kilogram ($6,778 a ton) on Feb. 18 on Middle East tensions and slowing
vehicle sales in China.
“We hope that by this measure we can stem the natural rubber prices from falling
further and all members can conduct the trade in an orderly manner,” the association
said.
The price of Indonesian benchmark SIR-20 grade has plunged from $5.7 a kilogram
in mid-February, the statement said, without providing the current level. SIR-20 was
traded at about $4.6 a kilogram as of March 11, according to data from the
International Rubber Consortium Ltd.
(Bloomberg, March 17, 2011)