INRO to meet on liquidating stocks in Kuala Lumpur

INRO to meet on liquidating stocks in Kuala Lumpur

KUALA LUMPUR (Reuters): The world's producers and consumers of rubber meet in the coming week to decide the fate of the International Natural Rubber Organization's (INRO) 140,000 tons of buffer stock following the body's dissolution.

INRO's governing council will also discuss the future of natural rubber during its special session in Malaysia's capital.

The conference starts on Monday with talks between heads of delegations followed by the council meeting. A working group, set up to chart the future of international cooperation in natural rubber, is scheduled to meet on Wednesday, INRO said.

The special session, scheduled to end on Friday, may conclude earlier depending on the progress of discussions, INRO acting executive director Gerard Loyen said.

"The main point of discussion will be disposal of the stocks, to do it the best possible way," Loyen told Reuters.

"I'm quite confident debate will be smooth, discussions will not be too difficult."

INRO's secretariat will present recommendations regarding an orderly disposal of the buffer stock at the meeting.

INRO formally dissolved in October after leading producers Thailand and Malaysia decided to quit the world's last producer- consumer commodity pact with economic clout.

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

INRO, headquartered in Kuala Lumpur, had been accused of not doing enough to support prices.

The rubber accord was originally scheduled to run until February 2001. Key consuming member states of INRO are the United States, the European Union and Japan.

INRO has up to three years to liquidate the stocks, but some traders said the stocks might be disposed in a year.

"They will not wait too long if the price is right, said a trader in Kuala Lumpur.

"But on the other hand, I don't think they will be selling a big amount at one time, so as not to disturb the market. The disposal will be gradual."

Malaysia and Thailand announced last month they will form a consortium to buy up INRO rubber stocks. Malaysian Primary Industries Minister Lim Keng Yaik said details were expected to be finalized by March.

Thailand and Malaysia agreed in September to cooperate in the rubber trade, pricing and technology as an alternative arrangement to INRO to prop up sagging prices. Second-largest producer Indonesia has opted to stay out of the pact.

At the meeting, INRO's governing council would also discuss a budget for 2000 and the appointment of a new executive director.

INRO comprises six producer and 17 consumer members. It was set up in 1980 to stabilize volatile world prices and had survived while similar commodity pacts have fallen.