Malaysia may quit INRO as prices keep dropping

Malaysia may quit INRO as prices keep dropping

KUALA LUMPUR (AP): Malaysia, the world's third-largest rubber producer, has threatened to pull out of the out of the International Natural Rubber Organization if Thailand does so, a news report said yesterday.

Malaysian Primary Industries Minister Lim Keng Yaik said both countries believe that rubber consumer countries are being very unfair to producer countries by keeping prices down.

Lim, speaking to reporters in Johor Baharu, 250 kilometers (150 miles) south of Kuala Lumpur, was quoted by the official Bernama news agency as saying that the idea arose after a recent INRO meeting.

At that meeting, Thailand criticized the consistent drop of world natural rubber prices, Lim said. Thailand and Malaysia would like to see rubber prices to help them deal with the region's deep financial crisis.

Citing the drop of rubber prices from US$1.03 per kilogram to $0.75 since July, Lim said the rubber producer countries had been waiting in vain for the past 20 years to see a real increase in rubber prices and amendments to the rubber prices intervention agreement.

Lim said consumer countries should take into account the ill- effects of a fall in rubber prices on economically troubled countries in Southeast Asia.

Malaysia, the world's third largest rubber producing country after Thailand and Indonesia, produces 1 million tons of natural rubber annually, about 800,000 of which is exported to consumer countries.

The INRO, set up in 1978, brings together six rubber producer countries, and 21 rubber consumer countries. The group stabilizes rubber prices by regulating demand and supply in the international market.