Indonesia does not need to re-cut export to boost back the price of weak rubber. Because the current price of rubber is not so influenced by the supply side of rubber producing countries.
Chairman of the Indonesian Rubber Companies Association (Gapkindo) Moenardji Soedargo said the current weakening of rubber prices is caused by the accumulation of rubber stocks in major importing countries, such as China. Meanwhile, most of the stocks that accumulate it, or 55 percent are rubber from Thailand.
Moreover, according to him, currently the fundamental condition of the rubber market in healthy condition, in the sense there are deficits on the supply side than demand. Thus, export cuts should not have much effect in fixing rubber prices.
"If we look at the world rubber stocks in May 2017, the ratio of global stock to world consumption per month is only 2.2 months, or better than the previous three months, that is, there is a balance of supply and demand side, So it is not export that must be intervened, "said Moenardji, Wednesday (18/7).
Looking at the condition, he said it is not the right policy if Indonesia continues the rubber export restriction agreement with Thailand and Malaysia which is commonly called Agreed Export Tonnage Scheme (AETS) this year. Although indeed, the implementation of AETS in the last year successfully boosted the price of rubber.
Meanwhile, AETS last year was conducted between March and August, where Indonesia reduced exports by 283.73 thousand tons. That number takes a share of 46.13 percent of the total export cut by three countries by 615 thousand tons.
This affected the price of natural rubber in the figure of US $ 1.96 per kilogram (kg) at the end of last year compared to the initial position of the year at US $ 1.09 per kg.
"But at the moment we are not looking at AETS as a solution for pricing, but it is up to the state, and we think that, in my opinion, the antibiotics will damage the immune system," he said.
Instead of cutting exports, business actors must be ingenious in managing upstream production and managing distribution to major rubber consumers. Thus, there will be no more wasteful stockpiling in ports receiving rubber exports.
"I think there is a shortage of rubber, but rubber stocks are piling up in front of market, of course, the price of rice in Jakarta is depressed, as is the case in China, although the rubber available in the world is still lacking," he said.
The plan, Gapkindo has natural rubber export target of 2.7 million tons in 2017. This figure increased 2.66 percent compared to last year's position of 2.63 million tons.
Meanwhile, Gapkindo also targets the increase of rubber production to 3.23 million tons this year, an increase of 2.27 percent compared to the previous position of 3.15 million tons. This increase in production is due to an increase in the number of replanting
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