EXPORT RESTRICTION ON RUBBER, the Fate of AETS Will Be Decided Next Month

The Agreed Export Tonnage Scheme (AETS) implemented since March 2016 is claimed to be able to keep the rubber price at a positive level after it fell last year. The scheme was initially scheduled to last only until August 2016, but was then extended to December 2016.

The International Tripartite Rubber Council (ITRC) that includes Indonesia, Malaysia, and Thailand, agreed to reduce export volume by 700,000 metric tons through the scheme. The ITRC countries plus Vietnam are the world's largest rubber exporters.

With AETS, Indonesia's rubber export volume this year is estimated at 2.45-2.5 million metric tons. This is lower than the 2015 realization of 2.63 million metric tons.

Vietnam, a strategic partner country of ITRC, also received an export reduction allocation of 85,000 metric tons. However, the cut allocation has not been realized and the quota was finally taken over by the three ITRC members.

The Director General of Foreign Trade of the Ministry of Trade Dody Edward stated that there have been no discussions about the continuation of the scheme. According to him, discussions about AETS will be held next month.

“In December we will meet again, but the exact date has not been determined yet. There have been no developments on Vietnam's status yet,” said Dody to Bisnis.

In August 2016, the government stated the need for broader cooperation to maintain rubber quality and global prices. One way to do that is to invite other producer countries, including Vietnam and Cambodia, to cooperate more extensively.