Natural Rubber Exports
Statistics Indonesia (BPS) data from 2016 to 2020 pinpoints ten destination countries for Indonesia’s natural rubber exports. Japan is one of the top three importers: Indonesia’s natural rubber exports to Japan have increased steadily: 430,000 tons in 2016, 453,100 tons in 2017, in 2018 there were 472,800 tons, while in 2019 the number of rubber exports to Japan was 493,700 tons. However, there was a significant decrease in 2020 to just 112,900 tons, with the onset of the Covid-19 pandemic.
Even though there was a downward trend in the amount of natural rubber production during the Covid-19 pandemic, there are at least five reasons why the natural rubber industry still survives. First, market demand for rubber products is always there, because they are needed daily. The tire industry dominates Indonesia’s natural rubber commodity downstream, taking up to 70%. Other downstream natural rubber products include medical devices, industrial equipment, vehicle equipment, sports equipment, household goods and NES rubber for electronics.
Second, rubber is a renewable natural resource that depends only on the ecosystem and the sun: unlike synthetic rubber, its price and availability is unaffected by any oil crisis. Third, natural rubber is produced from the bark of the rubber plant, which is regularly tapped. Only needing a superficial level of care, rubber plantations are liked by planters as a source of income. Fourth, rubber plantations protect the environment, not causing pollution and externalities. This is because rubber plantations are effective absorbers of CO2. Mature rubber plants per hectare can bind up to 72 tons of carbon. The fifth is that natural rubber has added value, using rubber wood from unproductive plants.
The author suggests that to increase the downstream investment of plantations for commodities such as palm oil, coconut, pine resin and rubber, the government needs to conduct market research for export destination countries interested in plantation products. Up-to-date and precise market research is primary capital for attracting downstream plantation commodity investors.
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To be more efficient and effective, the Ministry of Investment/ BKPM should collaborate with the Education Fund Management Agency (LPDP), under the Ministry of Finance. This collaboration obliges Master’s or Doctoral students majoring in economics, management, or agribusiness who receive LPDP scholarships and study in commodity export destination countries to conduct downstream commodity market research. A practical example is an agribusiness doctoral student who received an LPDP scholarship in Japan, and must therefore write a dissertation related to market research for natural rubber derivative products in the Japanese market.