[Kabar-indonesia] 19 RI Biz/Econ Reports: 6.7% Inflation; BNI Probe; Budget Deficit to Widen
JoyoNews at aol.com
JoyoNews at aol.com
Thu Oct 5 15:02:49 MDT 2006
19 RI Biz/Econ Reports:
- Bank Indonesia sees end 2006 inflation
rate at 6.7 pct
- JP: BNI shares resume trading, probe
still underway
- Indonesia expected to widen 2007 budget
deficit to 1.1% of GDP
- Bank Indonesia sets end 2010 deadline
to implement 'single presence' policy
- Indonesia's international reserves rise
to $42.35 bln
- Indonesia's non-oil/gas exports set to grow
by 10 pct in 2007
- Indonesia's Bank Muamalat assets
total US$876 mln
- Indonesia cuts prices of 157 generic
drugs by avg 20-30 pct
- Indonesia Buana Finance Gets $28M
Syndicated Loan
- Indonesia's Gajah Tunggal unit's 325 mln usd
bonds 'B' rating affirmed - S&P
- Indonesia's Ciputra Devt postpones 125 mln usd
bond sale to next year - report
- Indonesia's Truba Alam sets IPO price at
110 rupiah/share
- Indonesia to expand plantations under
revitalization plan
- Indonesia imposes duty on imported fruit
ahead of festive season
- Indonesia sells 2,000 tonnes palm oil in
export tender
- Indonesian palm oil tracks Malaysian
gains
- China import duty on Indonesia cocoa
products to end
- Asian Cocoa:Indonesia,Malaysia
Prices Down; Nybot, Liffe Key
- Interview-World's rubber demand
seen steady in 2007-IRSG
Bank Indonesia sees end 2006 inflation rate at 6.7 pct
JAKARTA, October 5 (XFN-ASIA) - Bank Indonesia expects consumer price
inflation to have more than halved to a rate of 6.7 pct by the end of
this year from 17.11 pct at the end of 2005, BI deputy governor
Hartadi Sarwono said.
"We (Bank Indonesia)expect the 2006 inflation rate to fall to below 7
pct, or to be exact to 6.7 pct," Sarwono told reporters.
He added that next year the inflation rate is likely to settle around
6 pct, with the potential for variation of plus or minus 1 pct.
The projections take into account positive macroeconomic developments
in Indonesia as well as monetary stability in the country.
--------------------------------
The Jakarta Post
October 5, 2006
BNI shares resume trading, probe still underway
Andi Haswidi, The Jakarta Post, Jakarta
Shares of state Bank Negara Indonesia were allowed Wednesday to resume
trading after being suspended on the Jakarta Stock Exchange for three days.
The resumption comes before the JSX completes its investigation into brokers
who may be responsible for BNI share price's staggering rise of 77.24 percent
in less than three weeks -- from Sept. 11 at Rp 1,340 (14 U.S. cents) to Rp
2,375 on Sept. 28, the day the suspension began.
"The investigation is ongoing but we decided to let the (BNI) stock enter the
market again as we have reached an internal conclusion about the phenomenon,"
JSX president director Erry Firmansyah said, without disclosing more details.
There is growing speculation the rapid increase of the share price was
triggered by market rumors about a government plan to divest part of its BNI stock.
With a more than 99 percent stake in the bank, the market expects the
government to divest more than 20 percent of its shares in the near future.
Talks about the divestment and its timing have not been publicly disclosed.
On Tuesday, Minister for State Enterprises Sugiharto said the government
would not permit any new issue of BNI shares, of which 0.89 percent are owned by
the public.
The decision to divest BNI shares, he said, would be made if the government's
privatization committee recommended it and President Susilo Bambang Yudhoyono
gave the go-ahead.
"The decision will show what needs to be done and (will decide) the amount of
funds collected through the rights issue process," Sugiharto said.
BNI's recent efforts to conclude negotiations on debt settlements with errant
borrowers were also given by some analysts as the reason behind the price
hike.
Recently, BNI announced management had just finished restructuring Rp 3.13
trillion worth of non-performing loans (NPLs) in the bank, from a total of Rp
5.46 trillion in NPLs from 340 debtors.
The restructuring measures included interest discounts, up to 50 percent cuts
on unpaid interest and the eradication of other fees.
The debt haircut, coinciding with the government's plan to divest its shares
in BNI, will likely result in more market optimism about the bank's share
price, analysts said.
--------------------------------
Indonesia expected to widen 2007 budget deficit to 1.1% of GDP
JAKARTA, October 5 (Asia Pulse/Antara) - The 2007 state budget deficit
is expected to widen from 0.9 per cent to 1.1 per cent of the gross
domestic product (GDP) due to additional expenditures needed by a
number of government agencies.
Earlier in a budget speech President Susilo Bambang Yudhoyono said the
government will propose a draft state budget for 2007 with a Rp33.1
trillion deficit or 0.9 per cent of the GDP.
Finance Minister Sri Mulyani Indrawati said on Wednesday night that
the proposed 0.9 per cent deficit could not be maintained.
Additional expenditures are needed by a number of institutions such as
the office of the chief minister for the public welfare and the
taxation directorate general, Idrawati said.
-------------------------------------
Bank Indonesia sets end 2010 deadline
to implement 'single presence' policy
JAKARTA. October 5 (XFN-ASIA) - Bank Indonesia (BI) has issued a
regulation ordering bank owners to have a controlling stake in no more
than one bank by end 2010, under a so-called 'single presence' policy.
The policy directive is one of 14 regulations issued by the central bank today
In a statement, the BI said shareholders who have controlling stakes
in more than one bank must submit action plans that will see them
adjusting their holdings to comply with the new 'single presence'
rule. These plans must be submitted no later than the end of 2007.
BI said there are three options for bank owners to take to comply with
the regulation -- divest majority stakes in the other banks; merge or
consolidate banks they own into a single entity, or create a holding
company.
An owner who control two banks will be exempted from this regulation
if -- (1) the two banks operate on different business principle
(conventional and sharia); (2) one of the banks is a joint venture
bank; (3) one of the banks is a branch office of a foreign bank; (4)
and one of the banks is a holding company which is created to comply
with this regulation.
To encourage owners to merge their banks, Bank Indonesia also issued a
rule providing incentives which includes relaxing payments of minimum
reserve requirements.
The BI also issued a rule easing restrictions on the maximum credit
allowed to be issued by a bank's affiliated parties in order to try to
boost credit expansion.
-------------------------------------------------------------
Indonesia's international reserves rise to $42.35 bln
JAKARTA, October 5 (Reuters) - Indonesia's international reserves rose
to $42.35 billion at the end of September from $42.00 billion at the
end of August, central bank data showed on Thursday.
Bank Indonesia said on its Web site ( www.bi.go.id ) base money rose
to 257.84 trillion rupiah ($27.99 billion) at the end of September
from 250.05 trillion rupiah at the end of August.
The figures below are in trillions of rupiah, except for international
reserves, which are in billions of dollars.
September 29 August 31
Base money 257.84 250.05
Net domestic assets 2.66 -3.43
Net claims on government 219.53 219.38
International reserves 42.35 42.00
------------------------------------------------------------
Indonesia's non-oil/gas exports set to grow by 10 pct in 2007
JAKARTA, October 5 (Asia Pulse/Antara) - Trade Minister Mari Elka
Pangestu said here on Wednesday she believed Indonesia's non-oil and
gas exports could still grow by around 10 per cent in 2007 although it
was predicted that the global economy would slow down and commodity
prices would drop as a result of decline oil prices.
"We have to anticipate the slowing down of the world's economy next
year and the tendency of declining oil prices that would also lead to
a decline of commodity prices," she said after a meeting on
preparations for post-fasting holidays at the ministry of
transportation.
She said if non-oil and gas exports could grow by 12 to 14 per cent in
2006 and reach US$100 billion in value the exports would certainly
reach US$110 billion next year.
"Commodity prices are still relatively good and stable until the end
of the year," she said.
Although high commodity prices would be one of the factors affecting
non-oil and gas export growth, she said the export of certain products
could still be boosted.
"We will continue increasing our competitive edge and conduct a
diversification, so that the source of export growth would not only
come from commodities," she said.
The Central Bureau of Statistics (BPS) reported that non-oil and gas
exports rose by 4.08 per cent to US$7.04 billion in August compared to
the total exports in the month that reached US$8.90 billion, which was
up slighlty by 0.73 per cent from July's exports worth US$8.82
billion.
The export growth in August was spurred mainly by increasing the
export of several commodities such as iron ore, mineral fuels, tin,
rubber and power generators/equipment.
The export of some leading manufactured products such as textile,
wood, wooden items and paper meanwhile declined.
>From January to August non-oil exports reached US$50.3 billion,
contributed by the industrial sector (US$41.5 billion), the
agricultural sector (US$2.6 billion) and mining (US$6.5 billion).
Exports of industrial products in the January-August period only grew
by 14.58 per cent compared to 21.66 and 35.26 per cent enjoyed
respectivley by the agricultural and mining sectors.
BPS chief Rusman Heriawan said Monday if the exports of manufactured
products could grow more substantially, the export growth in August or
in the January-August period could be higher.
He said the industrial sector contributed 64.26 per cent of exports in
the January-August period while the agricultural sector accounted for
only 3.49 per cent and the mining sector 10.10 per cent and the oil
and gas sector 22.15 per cent.
-------------------------------------------------------------
Indonesia's Bank Muamalat assets tota; US$876 mln
AMBON, MALUKU, October 5 (Asia Pulse/Antara) - The total assets of PT
Bank Muamalat, a banking company operating on the basis of Islamic law
(syaria), up to the end of September 2006 reached Rp8.05 trillion
(US$876 million), with the channeling of almost 200 per cent of the
funds.
Director of Bank Muamalat Indonesia Andi Buchari disclosed here
Wednesday that some 67.09 per cent of the funds channeled by the bank
have been absorbed by small and medium businesses, with non-performing
financing reaching only 2.0 per cent.
Thus, Bank Muamalat is better than other banks in terms of percentage
of non-performing financing as other banks' non-performing loans in
Indonesia is over 9.0 per cent, according to Andi.
The director of Bank Muamalat Indonesia, who was visiting this capital
of Maluku province to open a branch office of the bank, further said
that the quite big total assets obtained at the end of September is
thanks to the positive performance and innovative measures taken by
the bank.
Infobank Golden Trophy 2006 has attributed the success of Bank
Muamalat Indonesia to its very best performance over the last five
years. Business Indonesia daily has granted a Business Indonesia Award
to Bank Muamalat as the best national bank.
The bank has also won the Innovation Award 2005 from the minister of
research and technology in cooperation with SWA and Mars magazines,
noted as the safest foreign exchange bank by Pilar Bisnis magazine.
Other awards won by Bank Muamalat Indonesia are Klif Award as The Most
Outstanding Performance in Kuala Lumpur, and Syariah Award 2006 from
Investor Daily newspaper and magazine.
Bank Muamalat Indonesia, which was established by the Indonesian
Ulemas Council (MUI) and the Association of Indonesian Muslim
Intellectuals (ICMI) on May 1, 1992 is determined to become a model of
syariah financial institution in the world, Andi said.
With the opening of a branch office here, Bank Muamalat now has branch
offices in 205 cities/towns in the country. The opening of a branch
office in Jayapura, Papua, is scheduled for October 10, 2006.
-------------------------------------------------------------
Indonesia cuts prices of 157 generic drugs by avg 20-30 pct
JAKARTA, October 5 (XFN-ASIA) - The Ministry of Health said it has cut
the prices of 157 generic drug items by an average of 20-30 pct.
The decision, effective Oct 1, was taken to improve the affordability
of generic drugs to the poor, the ministry said in a statement.
The government determines the upper limit generic drug prices.
The ministry also said it has added 85 new items to its generic drugs list.
"The decision was aimed at broadening the range of (cheaper) drugs the
public can access," it said.
The generic drug price cuts are the second this year, following
reductions of 5-30 pct in early August.
-------------------------------------------------------------
Indonesia Buana Finance Gets $28M Syndicated Loan
JAKARTA, October 5 (Dow Jones)--Mid-sized finance company PT Buana
Finance (BBLD.JK) said Thursday it has secured a $28-million
syndicated loan arranged by Chinatrust Commercial Bank, Taiwan's
largest bank by assets.
"We will use the loan to finance lending for heavy equipment and
cars," Buana Finance President Director Eko Santoso Budianto told
reporters.
Chinatrust Commercial Bank is a unit of Chinatrust Financial Holding
Ltd. (2891.TW).
Budianto said the company plans to increase leasing by 30% in 2007,
from around IDR800 billion by the end of this year.
Bank of China, state-bank of India, Bank SinoPAC, Bowa Bank, PT Bank
Negara Indonesia (BBNI.JK) are among the members of the loan
syndicate.
--------------------------------------------------------------
Indonesia's Gajah Tunggal unit's 325 mln usd bonds 'B' rating affirmed - S&P
JAKARTA, October 5 (XFN-ASIA) - Standard & Poor's Ratings Services
said it has affirmed its 'B' rating on the five-year 325 mln usd
senior unsecured bonds issued by PT Gajah Tunggal unit GT2005 Bonds
B.V.
At the same time, it affirmed its 'B' long-term corporate credit
rating on Gajah Tunggal with a stable outlook.
Gajah Tunggal is Indonesia's leading tire manufacturing company.
"The rating on Gajah Tunggal reflects its highly leveraged financial
profile, weak cash flow protection measures, and inherent industry
risk," said Standard & Poor's credit analyst Yasmin Wirjawan.
"These weaknesses are partially offset by its low cost profile, strong
domestic market position and its geographic diversity in sales," he
said.
-------------------------------------------------------------
Indonesia's Ciputra Devt postpones 125 mln usd bond sale to next year - report
JAKARTA, October 5 (XFN-ASIA) - Property developer PT Ciputra
Development has postponed to next year a planned bond sale worth 125
mln usd which had originally been scheduled for last month, Bisnis
Indonesia reported, citing company director Tulus Santoso.
"We have delayed the plan and it is unlikely that we can launch it
this year. But it may be possible to carry out the plan next year,"
Santoso was quoted as saying.
The report said Ciputra was planning to use the bond proceeds to
finance its project in Hanoi, Vietnam.
--------------------------------------------------------------
Indonesia's Truba Alam sets IPO price at 110 rupiah/share
JAKARTA, October 5 (XFN-ASIA) - PT Truba Alam Manunggal Engineering
said it has set a price of 110 rupiah per share for its planned
initial public offering (IPO) of 5 bln shares, equivalent to 38.46 pct
of its enlarged capital.
The IPO will take place Oct 6-10 and the shares will be listed on the
Jakarta Stock Exchange on Oct 16.
In its prospectus, the company said it will also issue 2.8 bln
warrants, such that for every 25 new shares held, shareholders will be
entitled to 14 free warrants.
The warrants can be exercised from April 5, 2007 until Oct 5, 2009,
with an exercise price of 135 rupiah each.
--------------------------------------------------------------
Indonesia to expand plantations under revitalization plan
JAKARTA, October 5 (Asia Pulse/Antara) - The Agriculture Ministry
intends to develop 2 million hectares of plantations across the
country until 2009 under the plantation revitalization program.
The plantations include 1.5 million hectares of oil palm plantation,
0.3 million hectares of rubber plantation and 0.2 million hectares of
cacao plantation, the ministry said in a report on Wednesday.
The program will be implemented in stages starting in 2007 when 437
hectares of plantations will be opened, it said.
In a hearing with the House of Representatives on Monday, Agriculture
Minister Anton Apriyantono said the program will focus on expanding
plantations, and the rehabilitation of people's nucleus plantations.
To implement the program, Rp5.89 trillion (US$640.7 million) in
banking loans will be needed with a subsidized interest of Rp1
trillion, he said.
He went on to say that the country needs 425,000 hectares of sugarcane
plantations to achieve self-reliance in sugar by 2009.
Overall, the area of sugarcane plantations over the past five years
stood at an average of 350,000 hectares, impeding efforts to boost the
country's sugar production.
Apart from that, the low quality of sugarcane poses a major hindrance
to self-reliance in sugar, he said.
-----------------------------------------------------------------
Indonesia imposes duty on imported fruit ahead of festive season
JAKARTA, October 5 (Asia Pulse/Antara) - Indonesia's Agriculture
Ministry has imposed a 25 per cent duty on imported fruits and a
number of other agricultural commodities in an effort to stem their
flow into the country during the national religious holiday season, a
senior official said.
Achmad Dimyati, director general of horticulture at the ministry, said
here Wednesday the import duty was imposed on fruit from countries,
including Pakistan, Japan, South Korea, New Zealand and France.
The import duty is also imposed on Filipino, Indian and Chinese red
onions as well as red chilli from India and China, he added.
The import of Indian and Chinese red onions without import duty in the
past few weeks had caused red onion prices from Brebes, Central Java
to drop, causing financial losses to farmers in the district.
The influx of foreign oranges to Indonesia also threatened four
million orange growers in the country.
Dimyati also said his office also applied a red line policy for
imported fruits to limit the quantity allowed into the country.
"The price of domestic fruits will increase and eventually farmers are
willing to plant if fewer foreign products enter the country," he
added.
---------------------------------------------------------------
Indonesia sells 2,000 tonnes palm oil in export tender
JAKARTA, October 5 (Reuters) - Indonesia's state marketing centre sold
2,000 tonnes of crude palm oil in a monthly export tender, an official
said on Thursday.
The centre's head of marketing, Dahlan Surbakti, said Kuok Oils &
Grains Pte Ltd was the sole buyer, taking the entire amount at $418 a
tonne, free on board basis at Belawan port in North Sumatra and Dumai
port in Riau for November shipment.
The auction prices fell 7.11 percent from $450 a tonne in August's
export tender. The centre failed to sell palm oil on last month
auction.
The centre, which sells palm oil from state plantations, did not hold
any tender for the domestic market but was scheduled to resume tenders
on Friday.
--------------------------------------------------------------
Indonesian palm oil tracks Malaysian gains
JAKARTA, October 5 (Reuters) - Indonesia palm oil prices climbed on
Thursday, tracking gains in Malaysian crude palm oil futures, traders
said.
In North Sumatra's Medan, crude palm oil rose to 4,160 rupiah ($0.452)
a kg from 4,128 on Wednesday.
"Players embraced gains in Malaysia which led to higher local prices,"
a Medan-based trader said, adding 1,000 tonnes of crude palm oil
changed hands.
By the midday break, the benchmark third-month December <KPOZ6>
contract on the Bursa Malaysia Derivatives exchange rose 18 ringgit at
1,541 ringgit ($418) a tonne after trading in a range of 1,530 and
1,541 ringgit.
In Jakarta, olein traded at 4,700 rupiah per kg compared with
4,600-4,625 on Wednesday.
On the exports front, crude palm oil was offered at $422.5 a tonne for
October, November and December shipment, free on board Belawan, with
bids stood at $415.
At the state marketing centre in Jakarta, which sells palm oil from
state plantations, 2,000 tonnes of crude palm oil was sold in a
monthly export tender to Kuok Oils & Grains Pte Ltd at $418 a tonne,
free on board Belawan and Dumai port for November shipment.
-----------------------------------------------------------
China import duty on Indonesia cocoa products to end
JAKARTA, October 5 (Reuters) - Exports of Indonesian cocoa-based
products to China will have import duties removed starting Jan. 1,
2007, Jakarta's trade minister said on Thursday.
Indonesia, Asia's second-largest cocoa grinder after Malaysia, has
been trying to bolster exports of cocoa-based products in a bid to
boost the country's cocoa industry, which has suffered from low demand
in the past year.
"As part of China-ASEAN free trade agreement, China has agreed to
scrap the import duty on cocoa-based products from Indonesia," Mari
Pangestu told reporters, refering to the Association of Southeast
Asian Nations.
Pangestu said she and her Chinese counterpart would sign the tax
relief agreement in the resort island of Bali on Oct. 6.
China currently imposes 15 percent import duty on cocoa-based products
from Indonesia.
Pangestu said she hoped the move would improve the competitiveness of
Indonesia's cocoa-based products compared with other rivals in the
region.
"As compensation, we will scrap the import duty on China's dry chili
products that enter Indonesia," Pangestu said, adding Chinese chili
exporters currently had to pay 5 percent import duty.
Indonesia has 12 grinders with a capacity of 283,000 tonnes a year but
a lack of raw material and sagging demand for cocoa products has
forced them to cut back output.
The industry is expected to process 141,500 tonnes of beans in 2006.
During the processing of beans, grinders get butter and cake, which is
later pressed into powder.
Butter is a key ingredient for chocolate and also used to make
spreads, as well as being a component in soaps and cosmetics.
China imported 400,000 tonnes of cocoa beans in the first seven months
of the year from Indonesia's main producing area of Sulawesi island.
------------------------------------------------------------
Asian Cocoa:Indonesia,Malaysia Prices Dn;Nybot,Liffe Key
JAKARTA, October 5 (Dow Jones)--Asian physical cocoa prices were lower
in the week to Thursday, tracking movements in key destination
markets, traders said.
Cocoa futures on the New York Board of Trade - a major destination for
Indonesian beans - settled modestly lower Wednesday, with the December
contract dipping to a two-week low early in the session before buying
at the end pushed it up off the lows.
Speculative selling continued to push prices down, but trade buying
brought the market up toward the end of the session, said a Nybot
floor trader. Earlier in the session, prices trickled down as the U.S.
dollar strengthened against the U.K. sterling, said the trader.
The most-active December contract settled down $1 at $1,448 a metric
ton, following a price range between $1,435 and $1,463/ton. Second
most-active March settled down $1 at $1,483/ton, following a price
range between $1,470 and $1,496/ton.
December settled well below the 10-day moving average of $1,481/ton
and the 20-day moving average at $1,476/ton. A large gap remains open
to the upside between $1,562 and $1,572/ton.
On the London International Financial Futures and Options Exchange,
where a lot of Malaysian cocoa beans are sold, December finished up
GBP1 at GBP825/ton, following a price range between GBP821 and
GBP845/ton. March settled unchanged at GBP841/ton.
The Liffe December contract had finished GBP6 lower at GBP824/ton Tuesday.
Offers for Malaysia's SMC 1B cocoa beans were quoted at MYR5,250/ton,
down from MYR5,400/ton last week.
Offers for Indonesia's Sulawesi fair-average quality cocoa beans
recorded a more significant drop, quoted at IDR11,050 a kilogram, down
from IDR11,600/kg last week.
In the absence of market-moving fundamental news, Nybot futures have
been key in determining prices of Indonesian cocoa in recent weeks,
traders said.
Malaysian prices fell in tandem with Liffe prices, but a lack of
market activity had meant market participants were cautious and price
movements had not been drastic, said a Singapore-based trader.
"We just have to keep an eye on the futures," said a Singapore-based
trader. "In terms of on-the-ground activity (in Asia), there is
nothing much."
Meanwhile, shipments of cocoa are currently low due to the Ramadan
fasting month, in which agricultural activity can decline in countries
with significant Muslim populations, such as Indonesia and Malaysia.
The clearest near-term source of fundamental cues for Asian cocoa
markets will be the mid-crop harvest in Indonesia, expected to start
in the middle of this month.
The Indonesian Cocoa Association, Askindo, has revised its prediction
for output from the mid-crop harvest, saying it will likely be
slightly lower than its previous forecast of 200,000 tons.
The lower prediction is due to a prolonged hot season and damage from
insects. These natural phenomena have left many cocoa pods smaller
than is optimal and meant trees have produced excessive waste product,
Askindo Secretary General Zulhefi Sikumbang said late last month.
Sikumbang did not give a clearer forecast for mid-crop output of cocoa.
The main cocoa harvest on Sulawesi falls in April, peaks through May
and June, and tapers off in July. The mid-crop is usually harvested
from October through December.
Central, south and southeast provinces of Sulawesi account for 75% of
Indonesia's total cocoa output.
----------------------------------------------------------
Interview-World's rubber demand seen steady in 2007-IRSG
By Lewa Pardomuan
SINGAPORE, October 5 (Reuters) - Global consumption of natural and
synthetic rubber will rise around 3 percent in 2007, about the same
rate as in 2006, as firm demand from main buyers helps offset volatile
prices, an industry official said on Thursday.
"It's roughly stable. On average, it's about 3 and 3.5 percent," said
Hidde Smit, secretary-general of the International Rubber Study Group,
told Reuters on the sidelines of a conference.
The IRSG has said global consumption of natural and synthetic rubber
was expected to increase to 21.5 million tonnes in 2006 from 20.7
million tonnes last year.
The price of natural rubber has risen more than 300 percent since 2001
and the world's three main producers, Thailand, Indonesia and Malaysia
are cashing in on soaring demand, especially from China, said dealers.
The price of Thai rubber hit an all-time high of 102 baht ($2.71) a kg
in late May when unusually wet weather disrupted tapping and reduced
supply in the world's largest producer. But the price has since fallen
to around 60 baht as supply improves.
Thailand, Indonesia and Malaysia account for around 75 percent of
global production.
"The lower price nowadays will definitely have an effect on production
in these countries, although it's still high enough to tap rubber. So
that's no problem," said Smit.
"But it may have an effect on replanting. People say okay, it's lower
now, it's time to replant rather than replant last year when the price
was very high," he said.
Some countries in Southeast Asia such as Vietnam, the Philippines and
Cambodia may emerge as main rubber producers in the future but Smit
said growing supply was not a cause of concern.
"I think there's still a shortage for the coming 10 years, at least.
Maybe a million tonnes or so on an annual basis," said Smit, referring
to natural rubber supply.
The London-based IRSG said this week global demand for natural rubber
fell nearly 2 percent to 4.48 million tonnes in the first half of 2006
from a year ago because of high prices but demand from main consumer
China was seen recovering.
Chinese customs data showed China imported 1.02 million tonnes of
natural rubber in January to August this year, an increase of 19.7
percent from a year ago.
The IRSG said global production rose 2.9 percent to 4.43 million
tonnes from January to June this year compared with 4.30 million
tonnes at the same period in 2005.
Exports rose 3.4 percent to 3.27 million tonnes in the first half of
this year, aided by increased shipments from Malaysia, Indonesia and
Vietnam.
China, the world's main rubber buyer, was expected to consume 3.8
million tonnes of natural and synthetic rubber in 2006 from 3.6
million in 2005, according to the China Rubber Industry Association.
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Joyo Indonesia News Service
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