New Malaysia rubber plan will not boost prices: Traders<\/p>\n
KUALA LUMPUR (Reuters): Malaysia said on Friday it plans to
\nsupport local rubber prices by buying up to half of domestic
\noutput and will consider banning imports temporarily -- moves
\nthat traders said would not halt sliding prices for long.<\/p>\n
They said although the plan would boost prices in the short-
\nterm, international prices would prevail in the long term because
\nother countries were still exporting rubber.<\/p>\n
Primary Industries Minister Lim Keng Yaik said the government
\ncould require $1 billion to buy 450,000 tons of rubber from the
\nlocal market, half of the nation's total output.<\/p>\n
Malaysia might also impose a temporary ban of rubber imports
\nof about 550,000 tons, the national Bernama news agency quoted
\nhim as telling reporters.<\/p>\n
\"We will withhold the rubber from the export market and
\ninstead convince downstream processors to utilize more locally
\nproduced rubber,\" he said.<\/p>\n
Malaysia is the world's third largest producer of rubber,
\nafter Indonesia and Thailand.<\/p>\n
\"The country will lose its earnings from rubber. And I don't
\nthink this can work unless all producers decided to group
\ntogether to stop exports to boost prices,\" said a plantations
\nmanager.<\/p>\n
\"But it is difficult if Malaysia gives quotas to each estate
\nand factory but foreign producers like Thailand, Indonesia,
\nNigeria, Sri Lanka and Vietnam are still exporting,\" he said.<\/p>\n
Said a trader in a dealing firm: \"By imposing the ban,
\nThailand and other producers would not be able to sell to
\nMalaysia and this will cause excess of supply and drag prices
\ndown.\"<\/p>\n
The plan is subject to cabinet approval.<\/p>\n
Lim said the proposed market intervention would help ease the
\nplight of rubber smallholders. Smallholdings account for 85
\npercent of Malaysian production.<\/p>\n
Malaysia served notice to withdraw from the International
\nNatural Rubber Organization (INRO) last year, which will come
\ninto effect on Oct. 15, 1999.<\/p>\n
On March 18, Thailand also confirmed its intention to pull out
\nfrom INRO, which groups the world's rubber consumers and
\nproducers.<\/p>\n
INRO has not purchased rubber in the market since its last
\nintervention on Feb. 24 due to short of funds.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-malaysia-rubber-plan-will-not-boost-prices-traders-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}