Major rubber producers to work together

Major rubber producers to work together

BANGKOK (Dow Jones): Thailand and Malaysia will continue to try to persuade Indonesia to cooperate with them in a bid to strengthen rubber producer's bargaining power in the world market, Thai and Malaysian ministers said late Thursday.

In a meeting in Bangkok, Thailand's Deputy Agriculture and Cooperative Minister Arkom Angchuan and the Malaysian Primary Industries Minister Lim Keng Yaik discussed ways to further bilateral cooperation in the rubber industry under the Memorandum of Understanding signed in September.

The cooperation aims to help rubber farmers get fair rubber prices after the International Natural Rubber Organization (INRO) dissolved Oct. 13. Under the International Natural Rubber Agreement III, effective February 1997, INRO sought to mitigate wild price swings in world physical rubber markets.

The two ministers agreed to seek cooperation from Indonesia by trying to arrange a meeting with the Indonesian minister in charge of rubber, said Arkom in a press conference late Thursday. They will visit Indonesia if invited by the minister.

Thailand is the world's largest rubber producer, followed by Indonesia and Malaysia.

Lim said that the two countries would welcome Indonesian cooperation under the MOU, but it is more important to try to persuade Indonesia to work together with Thailand and Malaysia, as the world's top three producers account for around 85 percent of total global production.

"We can work together on joint strategic production and stock control, then we can get a better price" without having to yield to consumers' pressure, Lim said.

Thai ribbed smoke sheet rubber 3 grade was offered at 70-71 cents a kilogram Thursday, with standard Malaysian rubber 20 grade at 71.05-71.32/kg.

Lim said current prices are still around 40% lower compared with two years ago.

Lim also said the joint cooperation offer is open to all the other rubber producers, not only to Indonesia.