By Yoga Rusmana
March 24 (Bloomberg) -- Rubber output from Indonesia, the world’s second-largest producer, may decline this year if unfavorable weather persists into the second half after rains disrupted first-quarter tapping, an industry association said.
Production may decline to 2 million metric tons in 2010, Asril Sutan Amir, the chairman of the Rubber Association of Indonesia, said today by phone. Amir had forecast in December that Indonesia may produce 2.5 million tons this year, up from 2.4 million tons in 2009.
Lower supplies from Indonesia may help to further support the price of rubber, which has advanced more than 90 percent in the past year on expectations that the global economic recovery may boost demand for tires and gloves. Most of the Asian nation’s supply is grown on the island of Sumatra.
“It’s been raining almost every day since February in Sumatra, forcing farmers to reduce tapping,” Amir said from Jakarta, the capital. “Even if the rains happen just in the morning, we skip tapping for the entire day.”
Rubber for August-delivery on the Tokyo Commodity Exchange was little changed at 288.8 yen a kilogram ($ 3,190 a metric ton) at 11:40 a.m. Jakarta time. Thailand is the biggest producer of the commodity and Malaysia is third.
“This is the impact of climate change,” said Amir, whose association represents state-owned and private plantations, as well as processors, exporters and traders. The start of the dry season may be delayed north of the equator, which may hurt rubber production in Thailand and Malaysia, he said.
Heavy rains and storms were forecast for the three days from March 23 in central, southern and western Sumatra, the Meteorological, Climatology and Geophysics Agency said March 22 in a second alert this month. The first was issued on March 11.
Malaysia and Thailand lie to the north of the equator, which crosses Indonesia’s Sumatra.
(businessweek.com)
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