He said Thailand, the world's largest producer of rubber ahead of Indonesia, would reduce plantation areas and slowly cut production. "We don't know yet about the (Indonesian) government's policy. But it's impossible to control farmers," he spoke from Bogor, 60 km (38 miles) southwest of Jakarta.

Honggokusumo said the government had yet to adopt a policy which would curb sharp output increases, especially because prices of rubber remained flat in the international market. Rises in output will automatically cut prices in Indonesia and were detrimental to farmers, he said.

Thailand has said it plans to reduce rubber plantation areas to 12 million rais (12,200 sq km) in 2000, down from 12.3 million rais in 1999.

The Thai Rubber Association said that the rubber production was expected to rise to 2.23 million tonnes this year from 2.01 million last year in line with increasing world demand. Honggokusumo said trading was still quiet in Indonesia because many players had yet to return after the Eid al-Fitr celebrations.

Tappers yet to return to work
"Tappers haven't returned to work yet. They are still visiting relatives," said Honggokusono, adding that the upcoming Chinese New Year in February would also add to bearish sentiment.

Traders said February tyre-grade SIR20 was mostly flat at US 32 Cents/lb in Medan, Palembang and Surabaya and at 32.25 for March in those centres.

Gapkindo said Indonesia's rubber output was seen falling to 1.55 million tonnes in 1999 from 1.64 million tonnes in the previous year, largely the result of reduced latex yield on the trees following excessive tapping in 1998.

Indonesia's rubber plantations cover 3.5 million hectares of land on the islands of Sumatra and Kalimantan, on the Indonesian side of Borneo island.

-- (Reuters)