Rubber body out of business

Rubber body out of business

KUALA LUMPUR (Reuters): The International Natural Rubber
Organization (INRO), the world's last producer-consumer commodity
pact, formally dissolved on Wednesday as Thailand stuck to its
decision to quit the rubber body.

INRO's faint hopes of staying alive were extinguished when
Thailand, the largest producer, said on Tuesday it would not
reconsider its decision of quitting the 19-year-old group.

INRO's governing council last month decided to terminate the
current global rubber agreement from Oct. 13 in light of the
withdrawal of three exporting members -- Thailand, Malaysia and
Sri Lanka.

But the council said it would review the situation if any of
the withdrawing members changed their mind before that date.

"Until now, there is no sign of any change in the position of
the countries that are withdrawing," INRO acting executive
director Gerard Loyen told Reuters.

"Technically, we are in liquidation process as the agreement
has been terminated," he said.

Unhappy over rubber prices, currently at 30-year lows,
Thailand and Malaysia, the third largest producer of natural
rubber, decided to quit the commodity pact. The Kuala Lumpur-
based INRO had been accused of not doing enough to support
prices.

The rubber accord was originally scheduled to run until
February 2001. Key consuming member states of INRO are the United
States, the European Union and Japan.

Thailand said it would press on with its bilateral market
action plan with Malaysia. Last month, the neighbors agreed to
cooperate in rubber trade, pricing and technology as an
alternative arrangement to INRO to prop up sagging prices.

Malaysia, the most critical member of INRO, has long
complained that the organization tends to favor consumers.

INRO's council will now decide at a special meeting in
December on when to liquidate the group's buffer stock of 138,297
tonnes. INRO has up to three years to liquidate the stocks.

The group was set up in 1980 to stabilize volatile world
prices under the United Nations Conference on Trade and
Development (UNCTAD). It comprised six producer and 17 consumer
members.