INRO unsighted in market, weighing situation<\/p>\n
KUALA LUMPUR (AFP): The International Natural Rubber
\nOrganization (INRO) was yesterday closely assessing rubber's
\nsurging prices amid speculation that the uptrend was artificially
\ncreated by overselling in Thailand.<\/p>\n
INRO was still unsighted in the market Friday although dealers
\nhad widely expected the buffer stock manager to exercise his
\ndiscretionary right and begin his first sell-off in five years
\nfrom his 220,000 ton stockpile to arrest the price surge, dealers
\nsaid.<\/p>\n
"INRO does not want to create a situation where by selling,
\nprices start to decline at a time when it wants to stabilize
\nprices. That may kill the market," said an INRO source.<\/p>\n
INRO, which groups six natural rubber producers and 20
\nconsuming nations, operates a buffer stock to stabilize prices
\nwithin an agreed band.<\/p>\n
Under the INRO-administered International Natural Rubber
\nAgreement (INRA), the buffer stock manager may sell rubber when
\nINRO's five-day moving average, which serves as a daily indicator
\nprices, touches the "may-sell" level of 226 Malaysian\/Singapore
\ncents, a composite currency.<\/p>\n
But he must dispose of rubber from the stockpile when the
\nprice reaches the "must-sell" trigger of 236 Malaysian\/Singapore
\ncents. The five-day moving average rose to 227.31 Thursday from
\n225.13 Wednesday.<\/p>\n
It was at 179.49 Malaysian-Singapore cents at the end of
\nJanuary.<\/p>\n
Overselling<\/p>\n
"INRO is cautiously assessing the market to determine its
\nactual strength," the source said, adding that buyers had blamed
\noverselling by the Thai government for the price hike.<\/p>\n
"The Thai government is unable to deliver what it had sold and
\nthat has created an impression of a huge shortage. INRO is
\nchecking to ascertain the extent of the shortage," said the
\nsource.<\/p>\n
In Bangkok, an official of the Thai Rubber Research Institute
\nacknowledged that Thailand committed to sell more than 100,000
\ntons of rubber to China, 90,000 tons of which remained to be
\nshipped.<\/p>\n
"Thailand may have to buy from other markets to meet the
\ncommitment," the official said, while conjecturing that this
\ncould have stimulated the price increase.<\/p>\n
INRO sold the last of its previous stockpile of 360,000 tons
\nin 1989 after the spread of acquired immune deficiency syndrome
\n(AIDS) triggered a rush for condoms and latex gloves, sending
\nrubber prices to the highest levels since the Korean War in the
\n1950s.<\/p>\n
An American rubber buyer in Singapore said he was hoping INRO
\nwould come in soon to smooth the rise.
\n"As a buyer, we would, of course, want to buy at more reasonable
\nrates," he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/inro-unsighted-in-market-weighing-situation-1447893297",
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"sponsor": "Okusi Associates",
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