Rubber Industry of Indonesia: Production and Export Continue to Face Challenging Times
Indonesia is the world’s second-largest natural rubber producer (and therefore also ranks as the world’s second-biggest rubber exporter, after Thailand). However, this industry has also been facing some serious challenges. In this article, we are going to take a closer look at Indonesia’s rubber industry.
Rubber is particularly known for its elastic quality. This quality is one of the reasons why rubber is used in a wide variety of products and applications around the globe (ranging from industrial to household products).
There are two types of rubber: (1) natural rubber and (2) synthetic rubber. Natural rubber is made from the juice (latex) of the rubber tree, whereas the synthetic type is made from petroleum. Both types are interchangeable and as such influence each other's demand: when the price of petroleum rises, demand for natural rubber will increase. But when supply disruptions of natural rubber cause its price to rise, then the market tends to turn to synthetic rubber. For Indonesia, it is particularly natural rubber that forms an important commodity in terms of foreign exchange earnings, jobs, and for delivering raw materials for the (domestic) manufacturing industries.
Production of Natural Rubber
Based on data from Statista, Thailand remained the world’s biggest natural rubber producer in 2022, with a natural rubber output of 4.75 million metric tons that year. On second place is Indonesia, with an output of 3.13 million metric tons.
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