Rubber producing nations set up consortium to lift price<\/p>\n
The Jakarta Post, Gianyar, Bali<\/p>\n
The world's largest rubber producers -- Indonesia, Malaysia and
\nThailand -- signed on Thursday a memorandum of understanding
\n(MoU) to set up a consortium called International Tripartite
\nRubber Companies Consortium (ITRCo), whose main duty is to help
\nboost the current sagging prices of the commodity.<\/p>\n
Minister of Trade and Industry Rini MS Soewandi signed the
\nagreement together with Malaysia's Basic Industry Minister Liem
\nKem Yaik and Thailand's Minister of Agriculture and Cooperatives
\nShucheep Hansabad during a gathering on the resort island of
\nBali.<\/p>\n
The signing ceremony was witnessed by top leaders of the three
\ncountries including President Megawati Soekarnoputri, Malaysia's
\nPrime Minister Mahathir Mohammad, and Thailand's Prime Minister
\nThaksin Shinawatra.<\/p>\n
Indonesia, Malaysia and Thailand are the world's top rubber
\nproducers, which jointly account for around 95 percent of the
\nworld's natural rubber production.<\/p>\n
According to Rini, the establishment of the ITRCo was aimed at
\nlifting rubber prices to the \"optimum level.\"<\/p>\n
The consortium would purchase the commodity from the market in
\ncase of oversupply so that the price would gradually increase.<\/p>\n
But in case of high demand and short supply, the consortium
\nwould release its stock.<\/p>\n
\"The main goal is to increase the rubber price, so that this
\nwill benefit farmers,\" Rini said.<\/p>\n
Rini said that the price of rubber had dropped during the past
\nseveral months to the current level of around 45 U.S. cents per
\nkilogram.<\/p>\n
The normal price for farmers was about 70 cents to 80 cents
\nper kilogram.<\/p>\n
ITRCo aims to boost the price to around Rp 6,000 per kg (67
\ncents) in the Indonesian market, and to around 30 baht (71 cents)
\nin the Thai market.<\/p>\n
Chairman of the Indonesian Rubber Producers Association
\n(Gapkindo) Asril Sutan Amir welcomed the move, saying that it
\nwould significantly affect the price in the international market.<\/p>\n
\"Buyers are anticipating the signing of the consortium,\" he
\nsaid.<\/p>\n
On Thursday morning, the price of natural rubber jumped to 81
\ncents per kilogram, from 78 cents three days previously.<\/p>\n
The ITRCo was established following the forming of the
\nInternational Tripartite Rubber Council (ITRC) last year in Bali.<\/p>\n
Under the council framework, the three countries have pledged
\nto cut rubber output by 4 percent and exports by 10 percent
\nstarting this year.<\/p>\n
For 2002, Indonesia will lower its rubber exports to 1.23
\nmillion tons, while Thailand has set a limit at 1.93 million tons
\nand Malaysia will cap its export volume at 227,000 tons.<\/p>",
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