INRO begins meeting with future in doubt
INRO begins meeting with future in doubt
KUALA LUMPUR (Reuters): The International Natural Rubber Organization (INRO) began a meeting of its policy-making council on Thursday which officials said could determine the fate of the world's last commodity pact with economic clout.
The council was expected to decide on a proposal to adjust INRO's intervention price range at the two-day meeting in the Malaysian capital, officials said.
A press communique would be issued at the end of the meeting on Friday, INRO said in a statement.
Industry officials said INRO's governing council was likely to approve a proposal to raise the group's reference price in a last-ditch attempt to persuade Thailand and Malaysia to reconsider their decision to leave the organization.
But a Thail deputy minister said on Thursday it would not review its withdrawal decision even if reference prices changed.
Under the proposal, INRO's reference price would be raised by six percent to 227.85 Malaysian/Singapore cents per kg, and intervention levels would be adjusted upwards accordingly.
The new "may-buy" level would be 194 cents and "must-buy" 182 cents. The "may-sell" level would be 262 cents and "must-sell" 273 cents.
The reference price is currently 214.95 cents, while the "may- buy" level is 183 cents, the "must-buy" 172, the "may-sell" 247 and the "must-sell" 258.
Thailand and Malaysia have complained that the intervention level is too low and should be raised.
Several attempts have been made by INRO's governing council to adjust the price range to reflect Asia's economic conditions, but no consensus has been reached yet.
Barring any second thoughts, Malaysia will leave INRO on October 15 after a year's notice while Thailand has said it would also quit. Both countries said INRO failed to shore up rubber prices, now at long-term lows.
Thailand said on Thursday it may resume local rubber market intervention to boost prices.
Industry officials said INRO was doomed to collapse with the withdrawal of Thailand and Malaysia, which together account for more than 50 percent of the world's production.
Officials said the council would also decide on a proposal to replace the daily market indicator price for INRO's price range, currently a hybrid of the Malaysian ringgit and the Singapore dollar, by a single currency, perhaps the Singapore dollar.
"This could result in a larger increase in the reference price than what the producers had asked for," an official said.
Some delegates said council members might not be able to decide on INRO's fate this week and put off a decision until July.
INRO, set up in 1980 to stabilize world rubber prices under the U.N. Conference on Trade and Development (UNCTAD), groups six rubber producing and 16 consuming countries.
The producers are Thailand, Indonesia, Malaysia, Ivory Coast, Nigeria and Sri Lanka.
Consuming members are the United States, Japan, China, Germany, France, Austria, Belgium, Luxembourg, Denmark, Finland, Greece, Ireland, Italy, the Netherlands, Spain, Sweden and Britain. Belgium and Luxembourg are considered as one member.