Global rubber price pact signed soon
Global rubber price pact signed soon
KUALA LUMPUR (Reuter): Key rubber producers and consumers have indicated they will sign a new price pact in four weeks after nearly 10 months of deliberation, the International Natural Rubber Organization (INRO) said yesterday.
"The indications are that both the producers and consumers will sign on or before Dec. 28," INRO chairman Anura Ekanayake told reporters after a five-day council meeting of the organization.
The agreement, known as INRA 3, will be the third International Natural Rubber Agreement. It will start from January 1, 1997, and form the price and operational benchmark for INRO, which buys and sells rubber in the market to keep the commodity stable.
The Kuala Lumpur-based INRO is one of the last UN-supported commodity groupings with some muscle. It groups 27 countries, producers Indonesia, Malaysia, Sri Lanka, Thailand, Nigeria and Ivory Coast and 21 consumer nations led by the U.S., the European Union, China and Japan.
INRA 3 was drafted in February by the U.N.-backed INRO to replace the current pact, INRA 2, which came into force in 1987 and is scheduled to expire on December 28 this year.
INRA 3, valid for four years, was hammered out in February but is yet to be signed.
Ekanayake said INRO has, however, decided to operate for an interim period of one year until INRA 3, based on the unanimous support for the new pact at the just-concluded council meeting after much uncertainty in the last 10 months.
Without the interim period or INRA 3, INRO will be forced to liquidate its operations.
Ekanayake said INRA 3 will still be subjected to unanimous ratification by governments after its signing, for the pact to be globally valid. "They have a year to ratify but the indications are all very positive that they will," he said.
To assist the smooth transfer from INRA 2 to INRA 3, Ekanayake said the appointments of the INRO executive director, buffer stock manager and other staff, except for the deputy executive director, have been retained for the interim period.
The executive director's post -- the top job in INRO -- stirred much interest during the five-day meeting, with Malaysia saying it wanted the post under INRA 3 after Thailand relinquished the job under INRA 2.
Indonesia, which had held the executive director's post under INRA 1, countered Malaysia's demand by saying the post should revert to it under INRA 3.
Malaysia's delegation leader to the INRO, Ahmad Zubeir Noordin, told reporters that his country's bid was "duly noted" by the producers and consumers, including Indonesia.
"There was much cordiality over the issue," Zubeir said, without elaborating on whether the bid would be successful.
The council also approved a US$2.9 million fund to create a standards mechanism for rubber produced by African states.