Indonesia, the world's number two rubber producer, is expected to produce 1.95 million tonnes of natural rubber in 2004, up from 1.79 million tonnes last year, industry officials said on Friday.
"Overseas demand remains strong. The weather is also good," said Suharto Honggokusumo, executive director of the Indonesian Rubber Association (Gapkindo).
Indonesia is forecast to export around 1.8 million tonnes in 2004, up from 1.66 million tonnes last year, he told Reuters on the sidelines of the International Rubber Conference in the northern Thai province of Chiang Mai.
Despite a lower planted area, more smallholders are tapping more rubber because of favourable weather and higher prices.
"We still have some areas that are untapped, so if the price remains good, farmers can tap more," said Honggokusumo. He expected the Indonesian rubber price to stay at current levels in the coming months. "We expect the price to remain at this level this year, or slightly higher due to strong demand from overseas markets.
"However, the price is not expected to go much higher otherwise consumers will shift to synthetic rubber," he said. Indonesia's SIR20 bock rubber was offered at around $1.2/kg.
Synthetic rubber was offering at slightly higher than that, he said.
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