Rubber Prices Research Articles

Analysis of the Risk of Rubber Prices Using the ARCH-GARCH and VaR Methods on Farm Income in West Aceh District

The fluctuating price of rubber is often detrimental to farmers because farmers generally cannot manage the timing of the sale to get a profitable selling price. High price fluctuations provide opportunities for traders to manipulate price information on farmers and cause farmers not to enjoy the higher true price. This research aims to see how risky the price is received by rubber farmers and its effect on farm income in West Aceh District. This study uses the ARCH-GARCH method and VaR calculations for price risk analysis and Simple Linear Analysis to analyze the effect of price on farm income. The results showed that the price risk received by rubber farmers was high, namely 41.699% during the one-year sales period. The regression results show that the price significantly affects the income of rubber farming in West Aceh Regency with a probability of 0.000. The value of R2 is 0.935, which means that rubber prices influence 93% of rubber farming income, and variables outside the model influence 7%. The selling price of rubber influences the income of rubber farming. If the price of rubber is low, the farmers cannot afford to pay for rubber maintenance, thus disrupting rubber productivity. Decreased productivity will reduce farm income in the West Aceh Regency, which means that the price of rubber influences 93% of rubber farming income, and 7% is influenced by variables outside the model.

Dampak Perubahan Harga Karet Terhadap Kondisi Sosial Ekonomi Petani Karet Di Desa Ambukha Kecamatan Lolofitu Moi Kabupaten Nias Barat

Agriculture is an activity of cultivating plants that can be used for life and a process of maintaining plants and animals. North Sumatra Province is one of the provinces in Indonesia, which has great potential in developing the agricultural sector, one of which is the export commodity of Ambukha Village, Lolofitu Moi District, West Nias Regency. 154 KK. The purpose of this research is to determine the impact of changes in rubber prices on the socio-economic conditions of rubber farmers and sources of income for rubber farmers other than rubber in Ambukha Village, Lolofitu Moi District. The research method uses qualitative and quantitative, sampling is done by simple random sample, the sample in this study is rubber farmers who have been selected. The data collected in this study are primary and secondary. Methods of data collection using questionnaires, interviews, and field observations. The results showed that the decline in rubber prices greatly affected the social conditions of rubber farmers and the amount of income other than rubber could not cover the lack of income of rubber farmers in Ambukha Village, Lolofitu Moi District, West Nias Regency.

Exploring the effect of different number of periods in Thailand natural rubber supply forecasting models

To dates, many studies attempted to forecast the price of natural rubber while many others also attempted to forecast the amount. The objective of this study was to explore the effect of different number of periods used in various forecasting models for the amount of natural rubber in Thailand. Monthly data from the Office of Agricultural Economics in the years 2007-2019 were obtained. Then the data were classified into 12 data sets; each of which had different number of periods including 12, 24, 36, 48, 60, 72, 84, 96, 108, 120, 132 and 144 months. Decomposition forecasting methods consisted of the addition divide and the multiplicative divide methods were adopted. Model accuracy indicators were the mean absolute deviation, the mean square error and the mean absolute percentage error. The results showed that the amount of natural rubber and time were positively correlated at 99% confidence level. The most suitable model for forecasting the amount of natural rubber in Thailand found in our study was the multiplicative divide method by using the number of periods at 36 months yielding the mean absolute deviation of 66,264.61, the mean square error of 7,988,871,007.41 and the mean absolute percentage error of 24.66%.

Agroforestry rubber networks and farmers groups in Phatthalung area in Southern Thailand: A potential for an innovation platform?

The study took place in southern Thailand, in Phatthalung province, and is part of “Heveadapt,” a Franco-Thai research project. The aim of this project was to show how smallholder rubber plantations can adapt and remain sustainable in the face of variable climatic conditions and deep changes in socio-economic context. Among the various types of cropping systems, agroforestry practices were identified as promising. Rubber agroforestry systems (AFS) are economically more productive than rubber monocrop plantations and give more flexibility to smallholders, in particular when rubber prices are low, which has been the case since 2013. However, adoption of AFS during the mature period of the plantations is very low in Thailand. The policy to boost rubber agroforestry practices still needs to be developed with all local stakeholders. The objectives of the study were to identify the possibilities and capacities to use current AFS dynamic networks as a basis to set up a rubber agroforestry innovation platform. The research team studied: i) farmers’ collective organizations, groups or networks with rubber AFS partially or entirely and ii) the social dynamic enabling the sharing of knowledge and know-how. An individual producer’s grid, with original farmers or strong knowledge with ease of sharing, was also studied. The role of local institutions involved in the promotion of rubber AFS was also analyzed. This allowed us to design an innovation platform and to define activities that suit the socio-economic context of Phatthalung province. The main aims of the platform are to promote cooperation among innovative producers and the transmission between them of knowledge and know-how about rubber AFS. This could an efficient tool that Thai rubber institutions could set up to encourage the adoption of rubber AFS by farmers.

Analisis Pendapatan Dan Strategi Bertahan Hidup Petani Karet Sebelum Dan Saat Pandemi Covid-19

Rubber is a superior export commodity and is a source of foreign exchange for the country. This study aims to determine the differences in the income of rubber farmers and the survival strategies of rubber farmers before and during the COVID-19 pandemic in Padang Manjoir Village. The method used in this research is descriptive qualitative method, namely by field observations and interviews with informants at the location. The results showed that the income of rubber farmers before and during the COVID-19 pandemic was much different. The income of rubber farmers before Covid-19 was much greater than the income of rubber farmers during Covid-19. This is influenced by the price of rubber and the maintenance carried out by rubber farmers. Meanwhile, the strategies adopted by rubber farmers before and during Covid were not much different. Before Covid-19, rubber farmers continued to clear land, often tapped rubber and some of them had the capital to fertilize. Meanwhile, during the Covid-19 pandemic, more and more farmers were doing plantations around rubber fields and houses and then the produce was sold .

Dampak Penurunan Harga Karet Terhadap Kondisi Ekonomi Petani di Desa Lesung Batu Muda Kecamatan Rawas Ulu Kabupaten Musi Rawas Utara

Rubber commodity is one of the plantation commodities which has played an important role for the economy in Indonesia since ancient times. The success of rubber plantations is not only seen from its production and productivity, it can also be seen from the income received by the farmers. The purpose of this study was to describe the income, food consumption, and non-food consumption of rubber farmers before and after the decrease in rubber prices and to analyze the differences in income, food consumption, and non-food consumption of rubber farmers before and after the decrease in rubber prices in Lesung Village. Batu Muda, Rawas Ulu District. The number of samples of farmers in this study were 35 people. Methods of collecting data using the method survey. The results of this study indicate that income, food consumption and non-food consumption of farmers in Lesung Batu Muda Village, Rawas Ulu District, experienced a change of 38.37 into the Good category at the time before the decrease in rubber prices and after the decrease in rubber prices it decreased by 28.26 in. in the Poor category. Based on the results of the Wilcoxon test calculation, Z count (-5.26) < Z table (-1.65) with = 0.05 so Ho is rejected and H1 is accepted. Thus it can be concluded that the decrease in rubber prices has a significant effect on changes in income conditions, food consumption and non-food consumption of farmers in Lesung Batu Muda Village. Keywords: Rubber Price Decrease, Income, Food Consumption, Non-Food Consumption

THE EFFECT OF AVERRHOA BILIMBI EXTRACT AS NATURAL COAGULANTS ON THE CHARACTERISTICS OF RUBBER

Rubber is one of Indonesia’s main commodities resulting in a considerable number of people relying their incomes as rubber farmers. However, unstable rubber price proves to be a problem for these farmers. One solution to be offered is an alternative natural coagulant which is easily obtainable and able to produce good quality rubbers. Averrhoa bilimbi with its known acidic properties shows a prospect as a natural coagulant. This study aims to determine the effect of variation in the concentration of Averrhoa bilimbi extract on the characteristics of rubber clone IRR 118 as well as the advantages and disadvantages of using the extract as natural coagulant. The rubber clone used was IRR 118 with various Averrhoa bilimbi etracts of 20%, 40%, 60%, 80% and 100% and 2% synthetic chemical coagulant formic acid as comparison. The coagulant volume was 20 ml for each concentration and the volume of latex used was 100 ml. The characteristics of the rubber tested were TSC, DRC, Po and PRI. The results showed that the highest value of dry rubber content (DRC) was at 100% natural coagulant concentration which is 34% with a total solid content (TSC) value of 37% while the highest Plasticity Retention Index (PRI) value was at 100% concentration, which is 92%. This study exhibits the use of natural coagulant from Averrhoa bilimbi has met the Indonesian Rubber Standard SNI 06-1903-2000. Therefore, Averrhoa bilimbi extract can be used as an alternative coagulant for rubber latex.

The Effect of Agreed Export Tonnage Scheme (AETS) Policy on Indonesia's Natural Rubber Exports to Japan

Natural rubber is one of Indonesia's major agricultural export commodities. However, the export performance of Indonesia’s natural rubber to several destination countries experienced a downward trend during the 2011-2019 period. Japan is one of the leading export destinations for Indonesia’s natural rubber, experiencing a downward trend in export value. This study aims to analyze Indonesia’s natural rubber exports to Japan and its agreed export tonnage scheme (AETS) policy. The study utilized a monthly time series data from 2011 to 2019. The data were analyzed using descriptive qualitative and error correction model (ECM) methods. The results showed the implementation of AETS policy and world natural rubber price had significant effect on the export value of Indonesia’s natural rubber to Japan in the long-run, but it is not applied in the short-run. Indonesia needs to improve the quality and productivity of natural rubber production to increase the performance of Indonesia’s natural rubber exports to Japan. Furthermore, Indonesia needs to evaluate the effectiveness of the AETS policy on natural rubber.

Agrarian change, livelihood dynamics and welfare outcomes: Evidence from plantation crop farmers in Indonesia

In the tropical belt of Africa, Asia, and the Americas, smallholder farming is undergoing a significant transformation from subsistence-oriented to highly specialized and market-oriented plantation systems. While understanding the transition of livelihoods of plantation farm households over time is an important development goal, available empirical evidence is scant. This study provides the first quantitative evidence on the dynamics, transitions, and determinants of livelihood strategies linked to the crop choices of commercial farm households in the tropics. We use three-wave panel data of oil palm and rubber farmers from Indonesia for the empirics. Particular emphasis is placed on the trade-offs smallholders face in growing these two crops. Employing the dynamic livelihood strategy framework and Latent Markov Model estimations, we reveal that even highly specialized farm households pursue diversified livelihood strategies, and they actively switch between the identified strategies. Over time, significant changes are observed in the composition of strategies, which continue to be dominated by oil palm-oriented and off-farm-based activities. Inter alia, climate anomalies and a decline in oil palm and rubber prices influence the dynamics and trajectories of the livelihood strategies. We also find that a larger farm size possibly hinders households' labor allocation to more remunerative off-farm activities, implying that possessing a larger farm-land alone may not suffice for improving farmers’ wellbeing. We conclude by discussing the generalizability of our findings and providing implications for future research and policymaking.

Estimating the economic impact of the white root rot disease on the Malaysian rubber plantations

Research indicates that white root rot disease can inflict severe economic damage on the Malaysian rubber industry, which is caused by the fungus, Rigidoporus microporus. Accordingly, the economic impact of this disease is assessed by the partial equilibrium model, called the Malaysian Agriculture and Plantation Greenhouse Gas Model. The model represents the major commodities of the Malaysian agricultural markets and predicts market prices and quantities between 2023 and 2063. Although Malaysia has a million hectares of rubber plantations in 2018, the results indicate the rubber plantations could lose 400,000 ha to the oil palm plantations. Furthermore, a slow 5% fungal growth rate could infect half of the remaining stands of rubber trees. The oil palms help buffer the losses from the fungus since Rigidoporus microporus cannot infect oil palm trees. The loss of the rubber trees leads to rising natural rubber prices that decrease natural rubber exports and increase natural rubber imports. As the fungal infection growth rate increases, the natural rubber price rises further while the trade balance worsens. In addition, the rubber plantation owners can eradicate the fungus by paying an annual treatment cost per hectare. A higher treatment cost leads to the landowners treating fewer trees.

The Production Pattern of Rubber Farming and Farmer Behavior in Dealing with Price Fluctuations in Jambi Province, Indonesia

This study aims to determine (1) the magnitude of the fluctuation in rubber prices (2) the pattern of production of rubber and the behavior of farmers in dealing with price fluctuations and (3) the elasticity of the supply of rubber in Jambi Province. This study uses a survey method with the scope of the study area being Jambi Province by selecting two villages purposively, namely Muhajirin Village in Muaro Jambi Regency and Tanah Grow Village in Bungo Regency. Supply elasticity will be analyzed using secondary data and parametric statistical tests. The results showed that the fluctuation in the price of rubber in Jambi Province was quite large, namely Rp. 4,200 per kg in January 2002, then increased to Rp. 43,200 in February 2011, and decreased again to Rp. 6,000 per kg in June 2020. The pattern of rubber production in Muhajirin Village looks irrational where when the price goes down the farmers actually increase their production, that is, in order to meet their daily needs that cannot be reduced. This means that production can still be increased by increasing tapping frequency. The pattern of rubber production in Tanah Tumbuh Village looks rational, where when the price of rubber goes down the farmers do not tap rubber. To meet the needs of farmers, they switch jobs to other fields, such as laboring on plantations, construction workers, or panning for gold. Rubber’s supply elasticity in responding to rubber price changes in Jambi Province is small from one (<1) but the change is significant.

Forecasting Malaysia Bulk Latex Prices Using Autoregressive Integrated Moving Average (ARIMA) and Exponential Smoothing

Natural rubber is an important component of many developed countries' socioeconomic structures because it is frequently used to manufacture essential consumer goods such as tires and latex gloves. The natural rubber industry is heavily affected by the volatility and unpredictability of the natural bulk latex markets. Forecasting natural rubber prices is critical for rubber industry in procurement decisions and marketing strategies. This study aims to model monthly bulk latex prices in Malaysia using Autoregressive Integrated Moving Averages (ARIMA) and Exponential Smoothing. The models performance are measured using the Mean Absolute Percentage Error (MAPE) and Root Mean Square Error (RMSE). The Malaysian Rubber Board has 132 historical prices for the latex in Malaysia from January 2010 to December 2020. They are used for training and testing in determining the forecasting accuracy. Overall finding show that ARIMA (1,1,0) provides the most accurate prediction. With a MAPE of 8.59 percent and an RMSE of 69.78 sen per kilogram, this model is considered the best and highly accurate.

CONTRACTUAL RELATIONS ON RUBBER MARKETS: LESSONS FOR BUSINESS AND ECONOMIC POLICY

The choice of manufacturing organization form and contracting method on the industrial markets requires evaluation of market volatility, including identification of the risks from the side of adjacent markets. The study aims at determining the ways synthetic rubber market participants adjust to imbalances in supply and demand. The analysis of consumer properties of synthetic and natural rubbers in the context of their industrial consumption allows us to argue that these types of rubber turn out to be both complements and substitutes at the same time. What is more, some of them may belong to the same market within the product boundaries (in terms of antitrust legislation). We use foreign trade customs statistics and historical production and consumption data to identify the sources of market imbalances such as: the gap between synthetic rubber production cost and the price of natural rubber; economic bubbles caused by the fluctuations in supply and the price of natural rubber; volatility in the demand for rubber from its main consumers — tire factories. We then turn to the possible risk mitigation mechanisms that may help market participants to cope with the imbalances: formula pricing, vertical integration and horizontal differentiation. The implementation of these mechanisms in practice is illustrated through cases of Russian companies: PJSC Nizhnekamskneftekhim, PJSC TATNEFT and SIBUR. We conclude with the recommendations on tools for synthetic rubber production development.

Does rubber expansion hinder the migration of rural labor? Evidence from southwest China?

AbstractThe expansion of agroforestry crops in South Asia has resulted in the reallocation of local agricultural resources, including labor force. Based on two‐wave panel data collected from more than 600 smallholder rubber farmers in southwest China, this study examines the impacts of rubber expansion on the migration of rural labor. The results show that smallholders planting more rubber plantations have significantly fewer migrant family members and lower likelihood of migration, revealing a significantly negative effect of rubber cultivation on the migration of rural labor. Given that the migration of rural labor is a major trend in rural economic transformation, rubber farming appears to result in the resource curse in rubber planting areas. In addition, a positive interaction effect between rubber cultivation and the price of natural rubber on the migration of rural labor reveals that the resource curse effect of natural rubber decreases with the decrease in the price of natural rubber. A period with a relatively low price of natural rubber provides an opportunity to foster the migration of rural labor in rubber planting areas.

The Rubber Industry of Indonesia: Strategy for Competitiveness and Sustainability

The paper presents a systematic review of the latest developments in the natural rubber industry and describes the major predictors for the sustainability of Indonesia’s competitive advantage in this sector. In-depth interviews with experts were conducted to gather data from the private and public industries, International Trade Statistic, and Statistics Indonesia. The data were analyzed using the Diamond Model, which is widely used as the framework of a country’s competitive advantage. The data is processed to find the RCA value and mapping the factors affecting the competitive advantages of ITRC countries. In the face of falling rubber prices, the Indonesia rubber industry's recent management strategy is to increase competitiveness sustainably by increasing productivity in the upstream industry and efficiency in the downstream industry. To boost competitiveness even further, a more concentrated endeavor to stimulate innovation and technology adoption by farmers and businesses is required. The study offers a comprehensive examination of Indonesia as a country with major agricultural export industries. It methodically investigates the strategies that must be implemented to sustain the rubber industry in Indonesia. Keywords: competitiveness, industry, natural rubber, revealed competitive advantage, sustainability DOI: 10.7176/EJBM/14-3-06 Publication date: February 28 th 2022

Complementarity in Rubber-Salacca Intercropping System under Integrated Fertilization Mixed with Organic Soil Amendments

The replanting practice of rubber monocropping in Southern Thailand has depleted soil fertility. Most rubber planted areas in the region were under intensive chemical fertilization resulting in less soil organic matters and root proliferation. With the instability of rubber prices, some rubber farmers converted from monocropping into intercropping. Integrated fertilization in which mixed organic-inorganic fertilizers are combined with organic soil amendments could be considered in a rubber-based intercropping system to increase land productivity with cost-saving fertilization by rehabilitating soil properties. A study was conducted at a rubber-salacca intercropping farm comprised of 14-year-old mature rubber trees associated with eight-year-old salacca palms to identify the consequences of the integrated fertilization combined with two organic soil amendments: humic acid (HSA); chitosan (CSA). Changes in soil organic matter (SOM), leaf area index (LAI), fine root traits, tree physiological status, and crop productions under the two integrated fertilization were compared against the controlled application of conventional chemical fertilizer. The CSA application increased the SOM in the topsoil layer by 80%. In the 21 – 40 cm soil depth, the rubber roots treated with HSA and the salacca palm roots treated with CSA showed greater fine root length density (FRLD). Under CSA, the physiological status of the rubber trees showed less stress. The treatments of HSA and CSA showed 145% and 72%, respectively, higher in total production of salacca palm than that of the chemical fertilization. Improvements in the soil fertility, the root’s function, the crops’ yields, and the tree physiological status were consequences as complementarity in the system under the integrated fertilizations.

PERFORMANCE AND FORECAST OF INDONESIAN RUBBER EXPORTS TO THE CENTRAL EUROPEAN COUNTRIES

The price and consumption of rubber experienced a decline due to the global economic crisis, the US-China trade war, and coronavirus. This situation is unprofitable for Indonesia, and it must develop new target markets. Central Europe is one of the potential markets for Indonesian rubber. This study aims to ascertain the performance of the Indonesian rubber exports to Central European countries and forecast its future. The research used Indonesian rubber export data to Hungary, Poland, and Romania from January 1999 to March 2021. Descriptive statistics and autoregressive integrated moving averages were used to analyze the data. In the last three decades, Indonesian rubber exports to Central Europe have risen. The short-term forecasting indicates that Indonesian rubber exports to Poland will increase; on the other hand, exports to Romania will experience a decline. Meanwhile, exports to Hungary were relatively stable. This result was obtained using ARIMA estimation with different models for each country, respectively ARIMA(1,0,5) in Poland, ARIMA(2,0,1) in Romania, and ARIMA(2,0,1) in Hungary.

Latex production of some recommended rubber clones on low tapping frequency

In the current fluctuating global rubber price, cost production efficiency, such as reducing the tapping frequency in the rubber harvesting, is important to maintain the sustainability of rubber production. However, a decrease in tapping frequency can cause a decrease in latex production. This study aimed to determine the effect of low tapping frequency in several rubber clones on rubber production. The research was conducted at Indonesian Rubber Research Institute, South Sumatra, from July 2020 to January 2021. This study used a nested design with two factors, i.e., tapping and stimulant application frequency. The rubber tree used recommended clones of IRR 112, IRR 118, and BPM aged 24 years old after planting in 2010. The results showed that decreasing in tapping frequency from d3 to d5 decreased productivity by 30-40%, from d5 to d7 by 20-40%, and from d3 to d7 decreased by 60%. Stimulant applications increased the production of clones BPM 24, IRR 112, and IRR 118 by 83%, 66%, and 333%, respectively. Overall, tapping on IRR 118 with d5 frequency and the addition of stimulant showed better results. This study implies that reduction of tapping frequency in combination with stimulant application is prospective to be implemented.

Butadiene Rubber in the Petrochemical Industry

The Butadiene is a raw material used in the petrochemical industry. The use of Butadiene has risen with petrochemical market growth. The Global market is forecasting a demand growth for butadiene applications, especially for rubber materials. The estimated synthetic rubber market is $19.1 billion in 2021 and forecasted to reach $23.2 billion in five years. The dynamic growth in butadiene applications will introduce new products used in many things from the food industry to sports and goods. Also, the rubber materials have different applications in the automotive industry, oil and gas, medical products, and plastics. Companies’ strategic planning to increase the production of synthetic rubber for the global market. The demand increased as new applications were introduced to the market. The stability of oil prices will have the rubber market steady which always leads to optimal pricing. The diver for Butadiene rubber applications is to maximize production by having different kind of materials that applied for several products. The global business development indicated the ability to increases the synthetic rubber market rubber and capacities, which will enhance the chemical process techniques, new technology design, and efficiency that will maximize production and minimize product cost. Looking into the price difference between synthetic and natural rubber, many fluctuation variables were introduced in the price of each type. For example, synthetic rubber price is high, depending on crude oil, natural gasoline and naphtha prices, since those feedstocks are fed to the cracking units, as C4 is one of the cracking products. Therefore, any change in the oil prices will influence the butadiene price, which is the feed for most rubber plants. In addition, the utilities required for those plants to operate have a major impact on overall price. On the other hand, Natural rubber is an agricultural product and dependent on soil type and weather.

DAMPAK TEKNIK SADAP SPIRAL TERHADAP PENERIMAAN PETANI KARET DI KABUPATEN TANJUNG JABUNG TIMUR

One of the way to increase rubber productivity and its production, is by focusing to recommended tapping techniques. In East Tanjung Jabung Regency although the recommended rubber tapping technique (i.e. spiral tapping technique) had been socialized, but there were still many rubber farmers who done a non-spiral tapping techniques. This will certainly affect the amount of latex production and the rubber plants life duration. The low amount of rubber production will lead to a low number of sales, so it will have an impact on the low revenue of rubber farmers. The purpose of this study was to find out the impact of the application of spiral tapping techniques on rubber crops toward farmer. The results showed that simultaneously the independent variables had a Significant effect on the Farmer revenues. Partially, rubber production and rubber prices had showed a significant effect on farmer’s revenues, while the age of crops and tapping techniques, had no significant effect on the farmer’s revenues. Although the variables of tapping techniques did not significantly effect to the farmer revenue but it gave the higher revenue than the other tapping techniques.