INRO needs more funds to support rubber prices

INRO needs more funds to support rubber prices

SINGAPORE (Bloomberg): The International Natural Rubber Organization has called on member governments to contribute more money to finance efforts to shore up rubber prices.

"We have called on members to contribute, but we have not heard from them yet," Ahmad Zubier, INRO's executive director said yesterday.

He declined to say how much more money INRO needs to replenish its funds.

Last week, INRO's buffer stocks officer Ng Kok Tee confirmed the cartel had spent 100 billion ringgit (US$23.7 million) to buy coffee from the market.

Traders said the cartel spent 100 million ringgit from Aug. 10 to Aug. 13, to buy between 25,000 and 30,000 metric tons of natural rubber in the open market to boost prices.

INRO was not in the market from Friday, traders said.

The cartel's purchases failed to lift prices, which have fallen around 30 percent in the last 12 months. Ribbed Smoked Sheet 3 rubber futures for January delivery on the Tokyo Commodity Exchange fell for a fourth day to 97.8 yen a kilogram from Friday, down 3.1 yen, or 3 percent.

INRO has the mandate to buy rubber from the open market to bolster prices and sell from its buffer stocks when prices rise.

INRO's intervention indicator, a five-day moving average of the Daily Market Indicator Price, stood at 182.48 points as at Friday, up 0.37 points from Tuesday.

The indicator is still below 183 points, the level which allows the cartel to buy rubber on the open market.

INRO includes 18 importing and six exporting countries. It manages the third United Nations-backed International Natural Rubber Agreement, which came into force in February 1997. This agreement to stabilize world natural rubber prices extends through 2001.