Irvan Tisnabudi

New Regulation to ‘Increase Rubber Quality’ in Indonesia

A new regulation establishing higher standards for domestically produced rubber should improve its quality and boost export revenues, perhaps enabling the country to challenge Thailand as the world’s largest rubber producer and exporter, a rubber producers association said.

The Trade Ministry regulation was designed to boost the competitiveness of domestic rubber. It was issued in October and should take effect in mid-2010. The National Standardization Agency (BSN) will be responsible for enforcing the new standards.

Indonesia is one of the world’s biggest rubber exporters, with an average annual production of 2.3 million to 2.5 million tons.

However, rubber from the world’s top two exporters, Thailand and Malaysia, is considered higher quality, partly due to stricter supervision and tighter regulatory frameworks in those countries.

Indonesian rubber is considered lower quality because small-scale rubber tappers often adulterate their rubber with other substances to increase its weight, incorrectly believing this would increase the prices they receive from buyers.

“This is due to several factors, one of which is a lack of awareness,” said Suharto Honggokusumo, executive director of the Indonesian Rubber Producers Association (Gapkindo), adding that it was quality, not weight, that determined price.

Suharto said small-scale rubber tappers supplied about 85 percent of the country’s natural rubber. The new standards, he said, should help boost exports and encourage greater production.

He said Indonesia had the potential to surpass Thailand as the world’s largest producer and exporter of rubber, provided that standards could be improved.

“Indonesia has a better geographical location compared to Thailand for producing rubber,” he said. “The level of rainfall is also better.”

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