RI to maintain INRO membership
JAKARTA (JP): Indonesia is determined to maintain its membership in the International Natural Rubber Organization (INRO) even if the results of re-negotiations for a new International Natural Rubber Agreement (INRA) prove to be unacceptable.
Executive Director of the Indonesian Rubber Association (Gapkindo) A.F.S. Budiman told a press conference here Saturday that should the talks fail to satisfy the country's terms, Indonesia would merely refrain from signing the agreement.
INRA was first signed in 1979 and expired in 1987. INRA II, or INRA 1987, which was an extension of the first agreement, was signed in 1987 and was scheduled to end in 1993. Since producer and consumer countries failed to conclude a new pact, INRA II was extended for one year.
Despite tough and lengthy negotiations for INRA III in Geneva last month, Indonesia still believes that producer countries will in the end get what they want -- fair prices for rubber growers.
Rosediana Suharto, Chairman of the Indonesian delegation at the negotiations, said that INRO's 26 members still had disagreed on the buffer's stock reference prices.
The buffer stock is an instrument of market intervention used by the organization to maintain prices at a stable level. The maximum amount of the buffer stock is 550,000 tons.
She said that Indonesia and the five other rubber-producing countries -- Thailand, Malaysia, Sri Lanka, Nigeria and the Ivory Coast -- have insisted that inflation rates, production costs and farmers' revenues also be considered in setting the reference price.
The reference price, currently 196.84 Malaysian/Singapore cents per kilogram, is a composite index based on a six-month trend of rubber's Daily Market Indicator Price.
Extension
According to Budiman, the consumer countries -- which include the United States, the European Union, Japan and Korea -- on the other hand insisted on extending INRA 1987 without new provisions.
"Prices have certainly changed over the past few years, and revisions are needed. We also think it is important that rubber farmers receive fair prices," he reasoned.
During the renegotiating stage, in which Rosediana was spokesperson for the natural rubber-producing countries, most of the agreements already reached covered only administrative measures, "and issues concerning economic provisions remain to be negotiated," she said.
Producer countries were also dissatisfied by the structure of the price range used for the buffer stock.
"Producer countries will discuss this issue at the INRO Council meeting in Kuala Lumpur in the middle of this month. The results will be brought to the second stage of re-negotiations in Geneva next October," she explained.
"All the members of INRO have shown a positive attitude in the re-negotiations and I think an agreement will be concluded by the end of the extension period of INRA II in December," Rosediana said.
Indonesia's exports of natural rubber reached US$1.6 billion last year. During that time production reached 1.35 million tons, making it the second largest producer in the world after Thailand.
About 83 percent of Indonesian rubber production is of the Technically-specified rubber quality and 13 percent of the ribbed smoked sheet. (10)