Russia has offered to barter its Sukhoi Su-35 fighter jets for natural rubber from Indonesia.
"Russia is interested in our country’s crumb rubber. However, the government has not decided on the offer but if it agrees then it would draft ministerial regulations as the legal basis for such an agreement," Trade Ministry foreign trade director general Oke Nurwan was quoted as saying by The Jakarta Post Tuesday.
The proposed barter trade is valued at US$600 million.
The Indonesian Rubber Company Association (Gapkindo) has responded positively to the proposed trade in the hopes that it will expand the Indonesian rubber market and increase the price of Indonesian rubber.
Gapkindo’s advisory council member Asri Sutan Amir said rubber prices declined to Rp 6,000 (45 US cents) per kilogram in the first quarter of 2017, from Rp 10,000 earlier this year.
Meanwhile, Lukman Zakaria, of the Indonesian Rubber Farmers Association (Apkarindo), said the decline in price had occurred since March due to declining demand in the global market as a result of new contracts being signed in previous months.
“Because of the rampant number of contracts signed during the early months of this year, warehouses have now been filled with rubber stocks,” he added.
For the past two years, Russian officials have repeatedly announced that a deal for up to ten Su-35. However, so far little has been progressed as Indonesia is dragging its feet over the aircraft deal and is still considering alternatives to Russian military hardware.