Malaysia, RI call for an end to tin quota system
Malaysia, RI call for an end to tin quota system
KUALA LUMPUR (AFP): Malaysia said yesterday it would support Indonesia's call for an end to the quota system of the Association of Tin Producing Countries (ATPC) at a ministerial meeting in Bolivia in September.
Primary Industries Minister Lim Keng Yaik said Malaysia saw no merit in continuing with the ATPC's supply rationalization scheme (SRS) when its members and associates have been violating quotas for the past three-to-four years.
"We can forget about the SRS and let market forces determine the price of tin through demand and supply," said Lim, reacting to Indonesia's repeated calls to scrap the export curbs.
"It is no point continuing when most of the members, including associates, lack the spirit to make it a success," Lim told reporters.
Indonesia, which is planning to list state tin company Tambang Timah -- the world's largest tin company -- has argued that a producer-cartel dictating the market will no longer be acceptable and was becoming obsolete.
The ATPC groups Australia, Bolivia, China, Indonesia, Malaysia, Nigeria, Thailand and Zaire, which together account for nearly 70 percent of world's tin production.
Industry officials said Indonesia has long felt its output constricted by the quota system and wants it scrapped.
"We will support the call at the ATPC conference of ministers," said Lim, adding that Malaysia will be represented at the September meeting in Santa Cruz, Bolivia, by his deputy, Siti Zainab Abu Bakar.
Lim said Malaysia had fully endorsed the scheme when it was first implemented in 1987 to bolster tin prices at a time when global surplus stocks neared 100,000 tons.
The scheme brought the global overhang down to about 30,000 tons, almost near the ATPC's 20,000-ton for the market to achieve normalcy, Lim said.
"But somehow, the efforts of the past years have been defeated and prices remain depressed as oversupply by certain members and associates have again bloated the surplus stocks to about 50,000 tons," he said.
The price of tin, which had peaked at 29.15 ringgit a kilogram (2.2 pounds) in the mid-1980s before the market crashed in October 1985, closed 13 sen higher yesterday at 16.20 ringgit per kilogram on the Kuala Lumpur Tin Market.