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.