Indonesia, KL, Thailand to meet on rubber price plan

Indonesia, KL, Thailand to meet on rubber price plan

BANGKOK (Reuters): Officials from Thailand, Indonesia and Malaysia will meet in Kuala Lumpur in August to hammer out a way of setting up a minimum selling price for rubber, a Thai minister said on Wednesday.

"Senior officials from the three countries will discuss the details next month in Kuala Lumpur," Deputy Agriculture Minister Arkhom Engchuan told a news conference.

Thailand, Indonesia and Malaysia account for almost 80 percent of the world's rubber production.

The plan was expected to be ready for a ministerial meeting of the three countries in September, when it would be formally implemented, Arkhom said.

He added that the plan was to prevent buyers from further suppressing prices, which last year tumbled to their lowest levels in 30 years, around 23 U.S. cents/lb, mainly due to a glut in supply and weak demand. Prices are now around 25-26 U.S. cents/lb.

The three countries would set a minimum dollar price that would be used as a benchmark for RSS or TSR rubber, or both, Arkhom said. Each country would agree not to sell below this price and private exporters would be asked to cooperate. Thailand is the world's top rubber exporter, while Indonesia is second.

Ministers from the three countries met in Jakarta earlier this month to discuss ways of boosting rubber prices. At the meeting, Thailand and Malaysia agreed to set up a joint venture to buy the 138,000 tons of rubber held by the now-defunct International Natural Rubber Organization (INRO).

INRO has said Thailand and Malaysia will need the consent of its members to buy the rubber stocks, and the main issue will be the selling price.

But Arkhom said he had told Thai officials who will be attending an INRO meeting in Kuala Lumpur next week that Thailand wanted to see INRO sell all its stocks as soon as possible.

"Thailand is willing to buy all the stocks of INRO no matter how high the price is," Arkhom said.