INRO seeks U.S. nod to save rubber pact
INRO seeks U.S. nod to save rubber pact
KUALA LUMPUR (AFP): The International Natural Rubber Organization (INRO) opened talks here yesterday, confident that the United States would soon sign into agreement a new global price pact now in limbo without its support.
The new International Natural Rubber Agreement (INRA III), hammered out in Geneva in February last year, failed to garner enough consumer support when the United States missed the original Dec. 28, 1995 deadline for signatures.
"We think the U.S. will make a positive move by the end of the week," a delegate to INRO's week-long semi-annual session here said.
A special meeting had to be convened in Geneva on March 28 under the auspices of the United Nations Conference on Trade and Development to extend to July 31 the deadline for signatures to salvage the pact that is to replace INRA II, which expired in December last year.
The pact can only be valid if it garners 75 percent of votes from key producers and a similar proportion from key consumers.
At the expiry of the December 28 deadline, only four producers -- Indonesia, Malaysia, Thailand and Sri Lanka -- and two consumers, namely Japan and the European Union had signed.
INRO buffer stock manager James Hegarty said INRO's six rubber-exporting members and 21 consuming member nations spent the first day of talks on reviewing new rules and procedures in the new four-year pact.
INRA III would see a change in the weightage in the rubber grades used in the computation of INRO's daily market indicator price (DMIP) that guides the INRO buffer stock manager's buying and selling of rubber to stabilize prices.
The DMIP is culled from prices of three rubber grades -- the ribbed smoked sheets one and three (RSS I, RSS 3) and technically specified rubber 20 (TSR 20) in four major markets -- London, New York, Singapore and Kuala Lumpur.
The RSS One is to be assigned a weightage of 20 percent, RSS Three 30 percent and TSR 20, 50 percent in contrast to the current equal weightage assigned to the three grades.
"This is to more accurately reflect the current trade pattern in natural rubber," Hegarty said.
Traders said the TSR grade now made up 65 percent of rubber purchases, while RSS Three comprised 25 percent and RSS One the remaining share.