Big drop in natural rubber output seen in 2019 2019-12-10

Top natural rubber producers Thailand, Indonesia and Malaysia forecast an 800,000-tonne drop in output this year, the International Tripartite Rubber Council (ITRC), which represents the three, said on Wednesday.

The lower estimate comes amid concerns about fungal disease spreading through plantations in the three Southeast Asian neighbours, which produce 70% of the world's output.

The three countries had reduced exports by 441,648 tonnes as part of an export tonnage scheme from April 1, more than the targeted cutback of 240,000 tonnes, the ITRC said, adding that there was no "hanging stock" following the export curb.

Exports from the three countries were down 492,000 tonnes in January-June of 2019, versus the same period in 2018, it said.

The ITRC, in a statement, did not specify how much Thailand, Indonesia or Malaysia expected to export or produce in 2019.

The disease had affected 382,000 hectares (943,940 acres) of rubber plantations in Indonesia as of Oct 1, the ITRC said, adding that 2,135 hectares in peninsular Malaysia had seen leaf defoliation of between 50% and 90% from November 2017 to September 2019.

In Thailand, at least 50,000 hectares of plantations along the border with Malaysia may have been affected, the group said.

Low rubber prices in the past five to six years disincentivise the use of fertiliser, making rubber trees unhealthy and prone to the disease, the ITRC said.

Thailand is trying to contain the disease with help from the International Rubber Research Development Board and other organisations, while Malaysia has carried out training to spot and control the disease using fungicide.

In Indonesia, rubber association Gapkindo sees a decline of up to 540,000 tonnes in exports this year due to the disease, Chairman Moenardji Soedargo told Reuters.

"Prices are under pressure, it's economically not sustainable. Farmers don't feel like tapping rubber, they've lost the motivation," he said.

Indonesia exported 2.95 million tonnes of natural rubber in 2018, while production was 3.76 million tonnes, Gapkindo said.



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