RI and Malaysia ratify rubber pact to end long dispute

RI and Malaysia ratify rubber pact to end long dispute

KUALA LUMPUR (AFP): Indonesia and Malaysia have ratified a new
rubber pact to signal the end of a year-long dispute over who
should lead an international rubber producer-consumer group,
officials said Monday.

Malaysia ratified the third International Natural Rubber
Agreement (INRA III) on Dec. 24, followed by Indonesia on Dec.
27, said James Hegarty, the buffer stock manager of the
International Natural Rubber Organization (INRO).

"Officially, INRO has been informed by UNCTAD (the United
Nations Conference on Trade and Development) today (Monday) that
both Malaysia and Indonesia have ratified," Hegarty told AFP.

Malaysia and Indonesia had been vying for INRO's executive-
directorship, and Kuala Lumpur had threatened not to ratify the
new four-year pact if it failed to win the post, now held by
Thailand.

Indonesia had held the post during INRA I.

The Kuala Lumpur-based INRO, which groups six natural rubber
producer and 21 consumer countries, including the EU, administers
INRA through a buffer-stock mechanism to buy and sell rubber to
stabilize prices.

The dispute had held up the ratification process as both
Indonesia and Malaysia, being the key rubber producers along with
Thailand, hold the bulk of votes which must be gathered from
producers for INRA III to replace INRA II.

INRA II expired in December last year.

But Hegarty declined to say whether the ratification meant
that the dispute between the two countries over the post had been
resolved, and in whose favor.

But Malaysian government sources said Indonesia had agreed
that a Malaysian should fill INRO's top post.
Ahmad Zubeir Noordin, who is deputy secretary-general of the
Malaysian primary industries ministry, is tipped to succeed
Thailand's Pong Sono as INRO's new executive director. Zubeir is
head of Malaysia's delegation to INRO.

Hegarty said the new executive director will be announced
after INRO's semi-annual council meeting scheduled for February
24.

"The February 24 meeting will be the first for the new INRA
III council that will see the administrative process of transfer
of assets to the new council as well as the appointment of the
executive director," Hegarty said.

Industry officials said INRO was now waiting for ratification
by China and Italy, without whose votes consumers may not gather
enough backing to sign INRA III into agreement.

The United States, the European Union and some individual
members of the EU have ratified.

Both consumers and producers must garner at least 75 percent
of votes on each side for the new accord to come into force.

Hegarty described 1996 as rubber's "second best year" since
INRO's formation 17 years ago despite its benchmark five-day
moving average price taking a 22.3 percent dip to end the year at
241.71 Malaysian/Singapore cents a kilo (2.2 pounds).

"Prices were generally pretty stable last year with the five-
day moving average chalking up the year's high of 320.86 cents on
January 9 and the lowest at 238.69 cents on October 18," Hegarty
said.

"The market is now waiting for direction and a clearer trend
is expected to emerge only after the first quarter after the
festive periods," Hegarty said.