Rubber, known for its elastic quality, is a commodity that is used in many products and applications around the globe (from industrial to household products). There are two types of rubber, to wit natural rubber and 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. This section discusses Indonesia&#;s natural rubber sector. Indonesia is one of the largest producers and exporters of natural rubber.

The second chart shows a steep recovery in the natural rubber price in the last quarter of and start of . The reason behind this price increase are supply disruptions in Thailand. Massive and widespread floods in the southern part of Thailand, where most of the nation&#;s rubber cultivation takes place, had a big impact on the natural rubber supply (both production and distribution). Severe drought was also cited a reason for weak rubber production in Thailand.

A key driver for the global rubber market is the Asia-Pacific region where demand is growing robustly, led by China, the world&#;s leading rubber consumer that is expected to account for nearly percent of total worldwide rubber consumption by (mostly used in its tire manufacturing industry). Meanwhile, strong growth in rubber consumption is also expected to occur in Indonesia, India, Vietnam, and Thailand on the back of developing automotive industries in these countries.

Back at the Saigon Exhibition and Convention Center from to March , The th International Plastics & Rubber Technologies and Materials Exhibition for Vietnam organized by Informa Markets Vietnam in conjunction with Messe Düsseldorf Asia promises to provide a potential trading platform for plastic and rubber manufacturers and processors to introduce products, build brand image, expand new cooperation opportunities as well as identify economic potentials in the market of Vietnam.

Indonesia&#;s downstream rubber industry is still underdeveloped. Today, the country depends on imports of processed rubber products due to the lack of domestic processing facilities and the lack of a well-developed manufacturing industry. Little domestic consumption of rubber explains why Indonesia exports about percent of its rubber production. However, in recent years there is a change visible (although a slow one) as exports slightly decline on the back of increased domestic consumption. About half of the natural rubber that is absorbed domestically in Indonesia goes to the tire manufacturing industry, followed by rubber gloves, rubber thread, footwear, retread tires, medical gloves, carpets and other tools.