INRO to continue rubber disposal in London, New York

INRO to continue rubber disposal in London, New York

KUALA LUMPUR (AFP): The International Natural Rubber
Organization (INRO) yesterday agreed to continue selling
stockpiled rubber in London and New York to calm rising prices,
having exhausted regional stocks.

"The special INRO session decided that we continue what we
have been doing, but this time focusing our sales in Europe and
the United States as we have finished off our stocks in this
region," Aldo Hofmeister, INRO's buffer stock manager, said.

"We will continue disposing of a little bit daily in London
and New York," said Hofmeister, after the one-day special session
to review INRO's buffer stock operations.

He declined to say how much of rubber INRO still had in
warehouses in Europe and the United States.

But dealers estimated that whatever was left in Europe and the
United States only made up about a quarter of the 220,000 tons
INRO had before it began its sell-off on July 8, its first in
five years, to stabilize the rubber market.

Hofmeister said he told INRO's six producer- and 20 consumer-
member nations, including the European Union, at the meeting that
speculators and a definite shortage of rubber had reduced the
impact of his rubber sales.

"There was a definite void and we were unable to fill that
completely and the members recognized that and have directed that
we continue selling," he said.

At the close yesterday, Japan, the most volatile market in the
region, closed barely changed, with first position at 147.3 yen a
kilogram from 147.7 yen on Friday.

Hike

Delegates said producers were to have pressed for a hike in
INRO's reference price -- the price range that guides the buffer
stock manager's operations -- to better reflect rubber's current
buoyant position.

"The meeting discussed the proposal briefly, but no decision
was made on the reference price pending forthcoming negotiations
to be held in Geneva on the new pact," said a delegate.

Prices, which three years ago were averaging 215.00 sen (79.6
U.S. cents) a kilogram (2.2 pounds), have in the past two months
rocketed to six-year highs, the benchmark RSS 1 grade closing
yesterday in Kuala Lumpur at 323.50 sen a kilogram.

INRO's five-day moving average, derived from average prices in
London, New York, Singapore and Kuala Lumpur, has soared to
243.22 Malaysian-Singapore cents from 169-170 level at the end of
1991.

INRO members are to meet for UN-sponsored talks in Geneva in
October to hammer out a new International Natural Rubber
Agreement as a successor for the 1987-pact that expired in
December and is on a one-year extension.