INRO raises reference price by five percent<\/p>\n
KUALA LUMPUR (AFP): The International Natural Rubber
\nOrganization (INRO) Tuesday raised its buffer stock reference
\nprice by five percent to 206. 68 Malaysian\/Singapore cents a
\nkilogram (2.2 pounds) at a special session here.<\/p>\n
\"The upward revision should bode well for the market and be an
\nencouragement to producers,\" INRO buffer stock manager James
\nHegarty told reporters after the half-day meeting.<\/p>\n
\"It does increase the level at which the buffer stock can be
\nutilized in the market place,\" Hegarty said.<\/p>\n
Tuesday's revision will enable the buffer stock manager to
\nenter the market earlier to buy rubber and prop up declining
\nprices as the intervention levels, which are pegged to the
\nreference price, will be raised by 15 percent and 20 percent
\nrespectively.<\/p>\n
The \"may-buy\" price will be raised to 176 Malaysian\/Singapore
\ncents from 165, while the \"may-sell\" price will be 238 cents and
\nthe \"must-sell\" 248 cents.<\/p>\n
The reference price is reviewed every 15 months and will be
\nraised automatically by five percent if the INRO daily market
\nindicator price (DMIP) is above its upper intervention price in
\nthe six months before the revision.<\/p>\n
The revision had been based on the six-month DMIP average at
\nAugust 2 of 318.74 cents a kilogram. The DMIP is now at 235.82.<\/p>\n
The reference price was fixed at 196.84 cents a kilogram
\nduring the last revision in February 1993 after it was reduced by
\nfive percent, Hegarty said.<\/p>\n
Traders, reacting to the revision, said it will have little
\nimpact on the market as the price would reflect the actual market
\nsituation.<\/p>\n
\"Rubber prices have been low for a long time, and although the
\ncurrent market is weak, it will pick up in the long term. Prices
\nare not going to go back to the lows of olden days,\" said Furui
\nChiaki, of Singapore-based brokerage Yutaka Shoji.<\/p>\n
The fundamentals have improved, and although production is
\nrising, consumption is catching up fast, Chiaki said.<\/p>\n
Rubber prices, which had reached six-year highs last year,
\nhave moderated since February on rising production and
\nspeculative activities, brokers said.<\/p>\n
\"We should not only look at the US, Japan or Europe. We should
\nwatch consumption in the booming Asian region,\" he said.<\/p>\n
INRO groups six producer and 21 consuming countries. Among its
\nmembers are producer countries Malaysia, Indonesia, Thailand, and
\nconsumers the United States, Japan and the European Union.<\/p>\n
Hegarty said the special session also endorsed the appointment
\nof British national James Telfer Inglis, 55, as its deputy
\nexecutive director.<\/p>\n
Inglis, who has worked with Uniroyal Europe and Dunlop and has
\nvast experience in the rubber and tire industry, replaces Jurgen
\nKnote who retired in December.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/inro-raises-reference-price-by-five-percent-1447893297",
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