INRO sees progress at October talks

INRO sees progress at October talks

SINGAPORE (Reuters): The International Natural Rubber Organization (INRO) expects to make progress by the end of October on healing a rift that threatens to scupper the accord, a top INRO official said on Tuesday.

"We hope by the end of October to make some progress," Deputy Executive Director Gerard Loyen told Reuters in an interview.

A small group of producers and consumers are to meet next week to mull a paper on the pact's future and wider full council talks are set for October 22 and 23.

"We hope by then to have proposals from producers and for consumers to reach a more open position," said Loyen.

INRO, the world's last surviving producer-consumer commodity pact with the power to steer prices, runs a serious risk of foundering as a result of mounting opposition from producing countries over its failure to lift prices.

The world's third largest producer Malaysia has already vowed to pull out and the biggest producer Thailand is tipped to follow suit, but number two Indonesia has pledged to stick by the accord.

INRO intervenes in the rubber market by buying or selling when the price reaches pre-set levels and the price range is revised periodically in line with market trends.

But prices have suffered relentless pressure from tumbling consumption due to the Asian economic crisis and rising exports from Thailand and Indonesia where producers have cashed in on high local prices driven by depreciating currencies.

INRO was set up in 1980 under the United Nations Conference on Trade and Development (UNCTAD) and was one of a string of price- influencing pacts that operated during the 1980s.