PORTRAIT OF INDONESIAN NATURAL RUBBER

By : Adhy Basar Parhusip

Background

Under the global economic slow down caused by current monetary crisis, the Indonesian economy is likely to similarly slow down. The slow down in industrialized countries has increased pressure on commodity export performance; however, it is expected that with a relatively large market share and expectancy of world economy improvement in 2-3 years, the commodity exports will remain a long term economic pillar. The commodity exports, which have been the basis of the Indonesian economy post 1997 financial crisis, are expected to still be a significant driving factor to escalate the Indonesian economy in the future.

Agriculture commodity export performance (particularly plantation commodities) has shown moderate growth. Besides CPO that has remained a favourite export commodity, some of the commodities that have been an export trade mainstay are rubber and rubber products (export growth reached 65% in the past 3 years).

The role of rubber and rubber products in the national export is considered substantial when considering Indonesia is the world’s second largest rubber producer - with production of 2.55 million tons (following Thailand with production of 2.97 million tons) and with the largest rubber planted area of 3.4 million ha in 2007.