Asian rubber producers agree to cut output, exports

Asian rubber producers agree to cut output, exports

KUALA LUMPUR (Reuters): Leading Asian rubber producers,
Thailand, Indonesia and Malaysia agreed on Friday to reduce
output by four percent in 2002 and 2003 and cut exports by 10
percent from January to support sagging prices.

"This will result in production cutbacks of approximately
155,000 tons in 2002 and 200,000 tons in 2003. This scheme will
commence on January 1, 2002," said a joint statement released by
ministers of the three countries.

"These measures constitute restricting new planting,
accelerating replanting and diversification to other crop," said
the statement issued at the ministerial meeting of the Tripartite
Rubber Corporation (TRC).

The three countries, which make up almost 80 percent of the
world's natural rubber production, set up the TRC taskforce last
July to manage prices, production, stocks and trade.

Southeast Asian rubber prices are hovering around their lowest
levels in 30 years on oversupply, and industry sources say the
global economic slowdown has encouraged tire makers to cut output
due to weak demand for new cars and trucks.

The ministers said they also agreed to implement the export
carnet scheme starting next year and might ask exporters to limit
their forward shipments.

"The scheme is aimed at bringing about a better balance
between supply and demand through a cutback of 10 percent of
exports of the three countries," the statement said.

Malaysia's Primary Industries Minister Lim Keng Yaik, said the
three countries had abandoned an earlier plan to set up a buffer
stock and would concentrate on the export and production cutbacks
scheme.

"The market is totally dictated by consuming countries. At
present moment, rubber is below 50.00 U.S. cents/kg. At 50 cents,
you can't buy a cup of coffee in New York. I think it's a bit
ridiculous," Lim told reporters.