Indonesia Natural Rubber Production Drops, Rubber Industry Forced to Import

June 21, 2023

Natural Rubber Industry sector experiences a decline for domestic natural rubber production supply since 2017. As a result, total export for natural rubber products has decreased.

Executive Director of the Rubber Association of Indonesia (GAPKINDO), Erwin Tunas, said the average yearly export decline was 10%. It is predicted that this will continue this year.

Indeed, rubber exports have decreased, so on average, it has almost hit 10% every year since 2017. For the first time in 2017, Indonesia exported around 3.3 million tons; in 2022, it will drop to about 2.1 million tons, which is predicted to be challenging to maintain and even decrease. “Perhaps the reduction can be another 10% or around 1.8 million tons,” said Erwin when met by MNC Portal at the Borobudur Hotel, Central Jakarta, Wednesday (21/6/2023).

He further said that because Indonesia could not meet the export contract agreements with today’s domestic supply situation, it was inevitable to import rubber from other countries so that the needs of the domestic industry continued and the contract agreements could be continued.

The amount of rubber imported each year is 100 thousand tons. Erwin explained that the contract positions do not match because the contract system is long-term, so the companies always make long-term contracts, which means we are already bound to the buyer; for example, we have to meet export contracts in July, August, and September, which have been agreed.

According to him, the signature of the contract must be made in April to make it to December. When we saw it turned out that in October, what we thought we could fulfil turned out to be nonexistent, we automatically looked for other contracts or imports.

Erwin added rubber supplying countries for Indonesia varied, but most came from Africa. Nevertheless, he assessed Indonesia’s dependence on Africa can only be expected for a short time because many industries from China have invested in Africa, so rubber production in Africa will indirectly be supplied to China. But in the future, it cannot be expected for long-term supply since many industries in China are also investing directly there (Africa) to process them into industrial products for export purposes, he concluded.

Source: Okezone.com