Vietnam will join worlds largest natural rubber producers to cut exports in a bid to shore up the shrinking price of that commodity.
Vietnam will follow Thailand, Indonesia and Malaysia to cut its imports of natural rubber by 15 percent starting March 1 until August 31, the Indonesian association of rubber companies (Gapkindo) said.
Earlier the three member countries of the International Tripartite Rubber Organization (ITRO) which control 70 percent of the world supply of natural rubber agreed to cut exports by 615,000 tons from March to August.
With Vietnam joining the cartel the price of natural rubber is expected to rise in international market, Executive Secretary of the North Sumatra branch of Gapkindo Edy Irwansyah said here on Monday.
Under the arrangement, Thailand, the worlds largest producer is to reduce its exports of natural rubber by 324,005 tons, Indonesia, the second largest producer by 238,736 tons, and Malaysia, the third largest by 52,259 tons.
North Sumatra, one of Indonesias largest natural rubber producing provinces, contributes to the scheme by cutting exports 38,000 tons.
The decision of the four ASEAN countries would have impact on the rubber market, as they control more than 70 percent of the supply of natural rubber in the world, Edy said.
Edy said rubber price has remained low but in March the price began to climb, adding, he was confident the price of that commodity would continue to increase .
In January 2016, North Sumatras exports of natural rubber and rubber products fell again by 16.43 percent year-on-year in value.
The province earned only US$78.083 million in January 2016 down from US$93.375 million in the same period last year, head of the regional office of the Central Bureau of Statistics (BPS) Wien Kusdiatmono said here last week.
The production and price of rubber and rubber goods have continue to shrink, Wien said.
According to Edy though rising, the price of natural rubber is still much below the level considered ideal of around US$1.90 per kg.