IRCo to discuss volatile rubber prices

IRCo to discuss volatile rubber prices

Nitsara Srihanam, Dow Jones/Bangkok

The International Rubber Consortium Ltd. (IRCo) will meet this week in Bali to discuss ways to stabilize volatile rubber prices, IRCo's chief of secretariat, Yium Tavarolit, said late Friday.

IRCo's marketing committee will meet on Aug. 25 and Aug. 26 to review price movements and evaluate the market situation, Yium said, adding that prices in both futures and physical markets have been fluctuating due to speculation.

Rubber prices on the Tokyo Commodity Exchange, for example, rose sharply in July but fell this month, he said.

"We feel uneasy with the prices, as they are volatile and make it difficult for both rubber producers and consumers to manage (their operations)," Yium said.

"We want prices to move in line with actual demand-supply fundamentals."

One of measures that can be used to stabilize prices is a supply management mechanism, according to Yium.

"In the longer term, IRCo would come to buy and sell to stabilize prices in any physical or futures rubber markets that are too volatile, which would hurt rubber farmers," Yium said.

However, it is not yet time for IRCo to conduct such activity, as "it's not yet critical," he said.

The Bangkok-based IRCo was set up in 2003 to help stabilize rubber prices. It is an offshoot of a rubber agreement signed in Bali in December 2001, whereby the world's three biggest rubber exporters -- Thailand, Indonesia and Malaysia -- formed the International Tripartite Rubber Organization (ITRO).