Indonesian Chief Economic Minister Darmin Nasution on Friday said that speculative traders were responsible for subdued rubber prices as the commodity is not oversupplied.
The statement came as Indonesia, the world’s second largest rubber producer, is struggling to raise the prices of the commodity.
Nasution said the movement of rubber prices has not been in line with supply and demand.
“We see that rubber is not oversupplied, but why its prices persistently weaken. There must be something wrong. There are many speculators engaged in speculation of information,” he said.
To solve the problem, Nasution said, Indonesia will involve Malaysia and Thailand, also the world’s top rubber producers, to jointly solve the problem.
“There are needs to talk with them to make the prices movement in line with the supply and demand,” said Nasution.
On the domestic front, the minister said, a move would be carried out to raise prices by boosting demand.
The government plans to use rubber for asphalt mix which can be used in sea port, and railways as rail bearing.
Indonesia’s rubber output reached 3.5 million ton in 2017 and was expected to reach 3.6 to 3.7 million ton in 2018, according to data from the country’s rubber association.
The country exported a total of 2.6 million tons of rubber in 2017, it said.