Thailand, Indonesia and Malaysia, the world’s three largest rubber producing countries (accounting for about 70 percent of total global natural rubber output), have agreed to avoid excessive natural rubber supply on the international market by limiting their rubber exports. The countries also agree to curb new rubber plantation development as well as to spur domestic rubber consumption in each country. This statement was read out by Douglas Uggah Embas, Plantation Industries Minister of Malaysia, in Kuala Lumpur today (20/11).
These policies are conducted in an attempt to reduce the countries' natural rubber reserves and support rubber prices, which have declined again over the past two years. In October 2014, rubber prices touched their lowest level in more than five years. In a response to falling prices, rubber producers pledged not to sell rubber below the price of USD $1.50 per kilogram. This managed to support rubber prices. However, as demand from China is expected to decline amid the country’s slowing economy, natural rubber prices have been facing downward pressure again recently.
According to the latest new targets, domestic use of natural rubber (for example in tires) in the three aforementioned countries - which form the International Rubber Consortium (IRCO) - should rise by 10 percent annually.
In the period October 2012 - March 2013, the three countries had cut exports by 300,000 tons in an attempt to boost prices. However, Indonesia discontinued this agreement.