RI's INRO membership reliant on Thais

JAKARTA (JP): Indonesia may pull out of the International Natural Rubber Organization (INRO) if Thailand decides to quit the rubber buffer stock agency, an industry executive has said.

An executive of the Indonesian Rubber Producers Association said on Friday the Indonesian position in INRO would rely on the Thai government's decision.

If Thailand quits INRO, Indonesia would have no choice but to follow suit because the absence of Malaysia and Thailand would make the agency no longer effective, he said.

"I think, from the funding side, Indonesia would be unable to afford to cover the agency's operation without the help of Malaysia and Thailand," the association's executive, who asked for anonymity, told The Jakarta Post.

Thailand's deputy agriculture minister, Somchai Sunthornwat, said last week that the ministry would soon propose to Cabinet that Thailand withdraw from the agency after it ignored the country's plea to raise intervention prices to cope with a bearish market condition.

If the Thai Cabinet approved the proposal, Thailand would become the second member to quit INRO after Malaysia, which announced its withdrawal last month.

Malaysia said it would quit the INRO by Oct. 15 next year.

Thailand, Malaysia and Indonesia are the world's largest natural rubber producers. Without these three countries, INRO, which groups producers and consumers, will no longer be effective in controlling the world's rubber price.

The Indonesian rubber executive said that Indonesia favored Thailand to stay in INRO but admitted that it could do nothing but accept it if the Thai government approved the withdrawal proposal.

"We will attempt to persuade the Thai government through negotiations not quit INRO," the executive said.

He said Indonesia and Thailand will hold a meeting soon to talk about their final positions in the rubber agency.

The executive admitted that INRO, as charged by Malaysia and Thailand, had failed to prop up the world's depressed rubber prices.

"But for Indonesia, the agency is still needed to facilitate the country's rubber exports," he said.

INRO groups six rubber-producing countries and 17 consuming countries. The producing countries are Thailand, Malaysia, the Ivory Coast, Nigeria and Sri Lanka.

Consuming members are the United State, Japan, China, Germany, France, Austria, Belgium, Luxembourg, Denmark, Finland, Greece, Ireland, Italy, the Netherlands, Spain, Sweden and Britain.

The group's operations are based on a UN-brokered International Natural Rubber Agreement, now into its third cycle since 1980, and which expires in February 2001.

Production

Meanwhile, the International Rubber Study Group said in London Friday that world natural rubber production will outstrip demand in 1999 for the second year running, helped by likely record supplies from Thailand, Indonesia and India.

Figures released by the London-based intergovernmental agency show world natural rubber output rising to 6.800 million metric tons in 1999, from 6.610 million tons forecast for 1998 and 1997's estimated figure of 6.420 million tons.

Seventy per cent of rubber production goes to tire manufacturing, AP quoted the report as saying.

Consumption next year is projected at 6.700 million tons, compared with 6.560 million tons forecast for 1998 and the 6.480 million tons used in 1997, the agency said.

The agency forecast synthetic rubber production in 1998 and 1999 at 10.360 million tons and 10.310 million tons respectively, against 1997's 10.050 million tons. Consumption, which totaled 9.990 million tons in 1997, is forecast at 10.070 million tons this year and 10.220 million tons in 1997, the agency said.

The Group's individual 1998 natural rubber production forecasts (in thousands of tons, with estimated 1997 output in brackets) include Thailand 2,123 (2.031), Indonesia 1,576 (1,505), Malaysia 900 (971), India 609 (580), China 455 (444), Vietnam 219 (201), Ivory Coast 115 (107), Sri Lanka 107 (106), Nigeria 88 (90), Liberia 80 (67), Philippines 65 (65). (29)