Natural Rubber Export Indonesia 2011 Drop on weaker Rubber Demand

Natural rubber exports Indonesia in the fourth quarter are seen dropping to 500,000 tonnes, from more than 600,000 tonnes per quarter so far this year, on weaker demand from key consumers such as China, an industry official said on Friday.

Worries about slowing demand could lead growers in the world?s second-biggest rubber producer to cut exports if prices keep falling, the country?s rubber association said, ahead of a meeting at the end of this week by top producers to discuss the market.

?Our natural rubber demand from the international market, especially from China and other parts of the globe, has been starting to weaken since October,? Suharto Honggokusumo, executive director of industryassociation Gapkindo, told Reuters.

?We estimate that in the fourth quarter our exports may reach around 500,000 tonnes.?

Indonesia?s January-to-September natural rubber exports were 1.94 million tonnes, up from 1.7 million tonnes in the same period in 2010, Honggokusumo said.

Honggokusumo said he was still optimistic the country?s total natural rubber exports in 2011 would reach 2.4 million tonnes, up from last year?s annual exports of 2.2 million tonnes, but below an earlier forecast for 2.6 millionthis year.

Slowing demand from top consumer China, which accounts for about 35 percent of global consumption, has led it to increase rubber stocks in several tyre-making industrial centres such as in Shandong province, he said.

?Natural rubber prices are down now at $3.3 per kg and Gapkindo has been asking its members to halt rubber exports if the price falls below $3.0 per kg,? Honggokusumo said.

Such a move by the world?s second-largest rubber producer would mirror a recent export ban self-imposed by tin smelters seeking to prop up global tin prices. Indonesia is the world?s top tin exporter.

Tokyo rubber futures ended lower on Friday on profit-taking after recent gains, but prices were still propped up by expectations of further intervention by major producing countries this weekend, dealers said.

The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for April delivery fell 5.1 yen to settle at 273.5 yen ($3.55) per kg.

The world?s top three rubber-producing countries ? Thailand ? Indonesia and Malaysia ? are meeting in Bangkok where a decision on measures to stabilise falling rubber prices is expected on Saturday.

Benchmark Thai smoked rubber sheet (RSS3) has almost halved from a record high of $6.40 per kg in February. It ended at $3.45 per kg on Friday.