RI's crisis won't hurt rubber deal

RI's crisis won't hurt rubber deal

BANGKOK (Dow Jones): An agreement on rubber reached between the ministers of Thailand, Indonesia and Malaysia won't collapse despite the political crisis in Indonesia, Thailand's Deputy Minister of Agriculture and Cooperatives, Natee Khlibtong told Dow Jones Newswires in a recent interview.

Natee said the agreement was agreed upon by the three governments and will be implemented despite domestic crisis which may occur in any one of the countries.

"I'm confident that the cooperation won't fall through. It will continue to exist, but how soon it will be implemented depends on the readiness of the three countries," Natee said.

In a ministerial meeting in Bangkok July 5, ministers from the three countries agreed to cooperate in several areas in their efforts to boost world prices of natural rubber. The countries agreed to cooperate in rubber stock management, managing output levels and price support schemes.

Thailand is the world's largest rubber producer and exporter, followed by Indonesia and Malaysia. The three countries account for around 80 percent-85 percent of the world's rubber production.

The ministers also agreed at the meeting to set up a Tripartite Rubber Corporation, or TRC, to manage rubber trading, stocks withholding and market intervention buying activity. They also agreed to reduce output by 4 percent in 2002.

Should the political situation in Indonesia lead to a new minister being placed in charge of issues related to the rubber industry, Natee said he is still confident that the agreement on rubber will be carried out by the minister, as the pact was agreed by the three governments.

Thailand's Natee, Indonesia's Industry and Trade Minister Luhut Panjaitan and Malaysia's Primary Industries Minister Lim Keng Yaik are currently in charge of issues related to the rubber industry for the respective three countries.

A joint task force comprising rubber officials from Thailand, Indonesia and Malaysia is scheduled to meet in August to decide how the TRC will function, Natee said.

Recommendations will be submitted during the ministerial meeting September 7, he said.

"For the time being, the meeting will take place as scheduled," Natee said.

However, Natee said he is concerned that the political unrest in Indonesia might hinder the work of the task force as Indonesian officials might be reluctant to propose their recommendations to their minister, amid the unstable political situation in Indonesia.

"If the (Indonesian) officials (working for the joint task force) worry too much about politics...the work of the task force might be delayed," Natee said.

Thailand is expected to produce around 2.4 million metric tons of rubber this year, while Indonesia and Malaysia will produce 1.5 million-1.6 million tons and 600,000 tons, respectively.