INRO upbeat Thailand may stay

INRO upbeat Thailand may stay

KUALA LUMPUR (Reuters): The International Natural Rubber Organization (INRO) said on Tuesday it is optimistic Thailand would change its mind and stay in a price pact but was unsure about Malaysia.

Upset by depressed rubber prices, Malaysia and Thailand have said they will quit the world's only remaining commodity pact with power to intervene in the market. Rubber prices are currently around 30-year lows.

But their departures would not take effect until October 1999 and March 2000, respectively.

Thailand said last week it might stay with INRO if the organization did more to help producing countries.

"That has given some opening. We are positive about Thailand's approach and you can say that we are rather optimistic," INRO deputy executive director Gerard Loyen told Reuters in an interview.

He said the rubber industry in Thailand seems to be supporting INRO's role.

Loyen, who met Thai Deputy Agriculture Minister Arkom Eng- chuan in Bangkok last week, said Thailand was also considering paying its contributions to INRO's cash call to finance buffer stock operations.

INRO recently made a call for fresh funds worth 400 million Malaysian ringgit (US$105 million) from member countries to buy rubber.

Thailand and Malaysia have not paid their contributions to cash call-ups in August and December of last year which totaled 350 million ringgit.

Arkom took over responsibility for rubber policy from Newin Chidchob following a cabinet reshuffle in July.

Newin is known as an anti-INRO hawk. Since INRO has been trying to persuade Thailand and Malaysia to remain in the group, there had been hopes Newin's replacement could lead to Thailand changing its stance.

Arkom said he had set up a team to study INRO's new proposals on rubber intervention which would be discussed during a meeting in Kuala Lumpur on September 27-30.

In April, in a move spearheaded by consumer members to woo Thailand and Malaysia back, INRO unveiled a proposal that would substantially raise market intervention price levels.

This would allow INRO to intervene more quickly in the market. Loyen said INRO will vote on the proposal at the September meeting. "It's one of the proposals which need a decision," he said.

Loyen said the door was still open for Malaysia.

"We are ready to meet Malaysian officials at any time they wish. We still have time as Malaysia's withdrawal will only take effect in October," he said.