Indonesia, Malaysia, Thailand set up international rubber cartel
Indonesia, Malaysia, Thailand set up international rubber cartel
The Jakarta Post, Nusa Dua, Bali
Indonesia, Malaysia and Thailand, signed late on Monday an
accord to form an international rubber cartel in a bid to prop up
the price of the commodity in the world market.
The establishment of the cartel, called the International
Rubber Consortium Limited (IRCo), was signed by Indonesia's
Minister of Trade and Industry Rini Soewandi, Malaysia's Minister
of Primary Industry Loim Keng Yaid, and Thailand's Agriculture
Minister Sora-at Klinpratoom.
Ferry Yahya, director of agricultural exports at the Ministry
of Trade and Industry Ferry Yahya said that the IRCo would be
managed as a limited liability company by the three countries
with Indonesia, Malaysia and Thailand investing an initial
capital of US$1.5 million, $1 million and $2 million
respectively.
"The company will be managed independently and can seek funds
from the banking sector and other resources," said Ferry as
quoted by Antara.
He explained that based on the shareholders' agreement signed
on Monday, IRCo directors would consist of four representatives
from Thailand, three representatives from Indonesia and two
representatives from Malaysia.
The three countries will convene in Thailand to choose the
management of the companies and to set up operational procedures.
IRCo will also be tasked with encouraging other rubber
producing countries to join efforts to rationalize rubber
production, so that its prices could be raised to a fair and
remunerative level for the benefit of all producers.
Other prominent producers are Vietnam, India and Sri Lanka.
The forming of IRCo was initiated in 2001 when senior
officials of the three countries met in Kuala Lumpur under the
Tripartite Rubber Cooperation, in view of the fact that their
producers had been unable to get adequate compensation for the
product because market prices were determined by rubber
companies, mostly tire makers, in the developed world.
In August last year, the three countries signed the memorandum
of understanding for the establishment of the IRCo.
Thailand, Indonesia and Malaysia together produce 79 percent
of the world's natural rubber.