Indonesia still sees hope for INRO<\/p>\n
KUALA LUMPUR (Reuters): Indonesia has not given up hope for
\nthe survival of the International Natural Rubber Organization
\n(INRO) and will continue to urge Thailand and Malaysia to
\nreconsider their decision to quit the group.<\/p>\n
\"There's still hope. If not we might as well pack and go
\nhome,\" A.F.S. Budiman, executive director of the Rubber
\nAssociation of Indonesia, told Reuters on the sidelines of INRO's
\ntwice-yearly meeting in Malaysia's capital.<\/p>\n
\"We will try to urge Malaysia and Thailand to stay with INRO.\"<\/p>\n
Upset by depressed rubber prices, Malaysia and Thailand have
\nsaid they will quit the world's only remaining commodity pact
\nwith power to intervene in the market. INRO has been accused of
\nnot doing enough to support prices.<\/p>\n
Malaysia's departure would not take effect until October 15
\nwhile Thailand would not leave before March.<\/p>\n
Their departures could spell the demise of the organization
\nsince Thailand is the world's top rubber producer and exporter
\nwhile Malaysia ranks third after Indonesia.<\/p>\n
Budiman said Indonesia believed INRO remained the best option
\nto stabilize prices, currently around 30-year lows.<\/p>\n
He said the Indonesian government has also made clear it would
\nnot join a Thai-Malaysian pact to support prices.<\/p>\n
\"We see a lot of complications arising from such pact. And
\nthen there's the funding part. As you know Indonesia is tied up
\nto the IMF,\" he said.<\/p>\n
Thailand and Malaysia earlier this month signed a pact to
\ncoordinate the operation and management of direct rubber
\npurchasing programs for national stockpiling by withholding
\nexcess supply from the market and disposing of stocks in an
\norderly fashion.<\/p>\n
Budiman said the fate of INRO now rested with Thailand, which
\nwas expected to make clear its latest position at a meeting of
\nthe governing council on Wednesday and Thursday.<\/p>\n
\"We understand that the Thai delegates are actively consulting
\nBangkok. We are hoping for the best.<\/p>\n
\"If they decide to pull out, then the council can make a
\ndecision whether to close down INRO. You only need a special
\ncouncil meeting to terminate the agreement,\" he said.<\/p>\n
Budiman said the proposal to quote INRO's rubber reference
\nprice in Singapore dollars, adopted on Monday, would make little
\ndifference if producers were not contributing to the funding of
\nbuffer stock operations.<\/p>\n
Currently INRO's reference price is a hybrid of the Malaysian
\nringgit and Singapore dollar.<\/p>\n
Replacing the hybrid with the relatively stronger Singapore
\ncurrency would have the effect of lifting the reference price by
\nabout nine percent, so forcing the group to buy up rubber at a
\nhigher threshold price.<\/p>\n
\"It's implemented on paper but not in action. What INRO needs
\nright now is funds. INRO cannot do much without the money,\"
\nBudiman said.<\/p>\n
Apart from Indonesia, none of the other five rubber producers
\nhave responded to INRO's recent call for cash to finance buffer
\nstock operations.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesia-still-sees-hope-for-inro-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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