INRO to meet next week to review stocks sale

INRO to meet next week to review stocks sale

KUALA LUMPUR (Reuters): The International Natural Rubber Organization (INRO) said on Wednesday its oversight committee will meet next week to review the group's progress towards liquidating its stocks.

INRO buffer stock manager Arch Roberts told Reuters that the meeting on March 27 would allow members to assess INRO's position and its next move to dispose of the group's 140,000 tons buffer stock in the market.

The committee, which has no decision-making authority, reports to INRO's governing council which will next meet from Sept. 4 to Sept. 7 in Kuala Lumpur.

INRO aims to sell 34,000 tons of rubber per quarter, starting in the first quarter of this year, if market conditions allow. Sales must be completed by June 30, 2001.

But low prices had prevented INRO from selling, and it is unlikely the group will make any sale in the first quarter.

INRO's policy-making council decided at a special session in Kuala Lumpur in December that the buffer stock manager should reject any bid that was below prevailing market conditions or failed to cover INRO purchasing and carrying costs.

INRO's cost price as of mid-October was 69 U.S. cents a kg, while tyre-grade rubber is currently trading at 66 to 67 cents a kg.

Roberts said members would have to decide whether to extend the liquidation period or sell rubber at a loss.

INRO has opened its warehouses in Malaysia's Port Klang, Bangkok and Indonesia's Medan for potential buyers to inspect the stock.

But it declined to sell its stockpiled rubber in Port Klang and Bangkok early this month because bids were too low.

INRO was formally dissolved on Oct. 13 after leading producers Thailand and Malaysia decided to quit the world's last producer- consumer commodity pact.

INRO had been accused of not doing enough to support prices, a charge it denies.

Thailand is the world's top rubber producer and exporter while Malaysia ranks third after Indonesia.

Following the dissolution, the buffer stock manager is retained to oversee the liquidation of all INRO stocks and under INRO rules, the stocks have to be liquidated within three years.