INRO sales will not affect rubber price: Official<\/p>\n
JAKARTA (JP): The planned sales of the entire stocks held by
\nthe International Natural Rubber Organization (INRO) will not
\naffect the world's rubber prices, the organization's executive
\nHatanto Reksodiputro, said here on Monday.<\/p>\n
Hatanto, who is also the Director for International
\nCooperation at the Ministry for Industry and Trade, said that
\nfears that sales of the rubber stocks would cause a plunge in
\nrubber prices were exaggerated.<\/p>\n
\"Actually, the people expressing such fears are probably
\nhoping that rubber prices will fall, so that they can buy as much
\nas they can,\" Hatanto told reporters on the sideline of the House
\nof Representatives' state budget plenary meeting.<\/p>\n
Last Friday INRO agreed in a meeting in Kuala Lumpur on a
\nprocedure for selling its stocks before the organization formally
\ncloses down.<\/p>\n
In the meeting chaired by Hatanti, the organization's
\ngoverning council approved the use of forward sales to dispose of
\nthe stock but limited these to six months forward.<\/p>\n
The organization will clear its stocks at prevailing market
\nprices by June, 2001.<\/p>\n
However, traders warned that rubber prices would tumble to new
\nlows, as traders could quote rubber at prices lower than current
\nones.s<\/p>\n
They said that rubber demand should have risen, since
\nsynthetic rubber would become more expensive in coming months,
\nbecause of the soaring crude oil prices.<\/p>\n
But Hatanto dismissed their worries, saying that the 138,000
\ntons was only a small amount compared to world consumption.<\/p>\n
Referring to a world tire producer, he said that such a
\ncompany could consume 100,000 tons of natural rubber per month.<\/p>\n
\"So if INRO only releases 138,000 tons, what difference will
\nit make,\" he said.<\/p>\n
INRO, he said, agreed to sell its stock in the future market
\nand was hoping that the sales would lift rubber prices.<\/p>\n
The move is expected to give INRO flexibility in selling six
\nmonths forward to profit from better deals.<\/p>\n
Hatanto said that by March next year, the organization would
\nhave disposed of 110,000 tons of rubber, with 28,000 tons to
\nfollow within the remaining two months until June.<\/p>\n
\"We are convinced that by March 2001, when we have released
\nINRO's rubber stock, prices will have reached 70 U.S. cents a
\nkilogram,\" Hatanto explained.<\/p>\n
At present, he said, international rubber prices for the
\nrubber-smoke sheet type ranged between 59 cents to 60 cents per
\nkilogram.<\/p>\n
Separately, AFP news agency reported on Monday that INRO
\nexpressed its confidence it would meet June's deadline to sell
\nits entire stock.<\/p>\n
\"I don't think we will have a problem selling (to meet the
\nJune deadline) but I suspect we will get very low bids in the
\nearly stage,\" said chief executive Arch Roberts.<\/p>\n
INRO said that the sales of the buffer stock would start as
\nsoon as possible and members would be allowed to bid.<\/p>\n
Roberts said INRO would not sell if the bids were too low.<\/p>\n
\"It is my decision at what price we sell,\" he told AFP. \"We
\nwant to get the highest price.\"<\/p>\n
He further said INRO would not set any price band to guide
\nbuyers. \"We want them to give us an idea what a good price is.\"<\/p>\n
Traders have said the sell-off will further depress
\ninternational prices.<\/p>\n
INRO announced in September last year that it would disband
\nafter Malaysia and Thailand announced they would quit the group
\nfor failing to support prices. Sri Lanka also quit.<\/p>\n
Thailand is the world's largest natural rubber producer,
\nfollowed by Indonesia and then Malaysia. (bkm)<\/p>",
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