Rubber ministers discuss ITRCo management

Rubber ministers discuss ITRCo management

Dow Jones, Bangkok

Ministers from Thailand and Malaysia met late Thursday to discuss appointing the management board for the rubber consortium, Thai Deputy Prime Minister Pitak Intrawitayanunt told Dow Jones newswires.

Pitak, along with Thai Agriculture and Cooperatives Minister Chucheep Hansaward, met with Malaysian Primary Industries Minister Lim Keng Yaik at a dinner meeting Thursday in Bangkok.

Indonesia's Minister of Trade and Industry Rini M. Soewandi was unable to attend the meeting due to the cancellation of her flight caused by a technical problem with the plane.

Earlier this month, Thailand, Indonesia and Malaysia signed a memorandum of understanding to formally establish the International Tripartite Rubber Corp., or ITRCo, which will buy and stockpile rubber to help shore up prices.

ITRCo's management board will look at details of the consortium's functions, particularly on how it will buy and stockpile rubber, how much rubber it will buy and at what price.

The committee will comprise nine representatives from the three countries. Thailand, as ITRCo's major shareholder, will name four representatives, while Indonesia will name three and Malaysia will name two, Pitak said.

However, after the meeting, Pitak said the ministers agreed that each country will initially name two representatives and the others later. The three countries are considering the representatives, Pitak said.

The ministers also reaffirmed at the meeting the plan to cut rubber supply and exports by 4 percent and 10 percent respectively, Pitak said.

"We will next week send letters to officially inform Thai exporters about the export cut plan," Pitak said. This is to ensure that the plan will be carried out even though Thai rubber exports this year are unlikely to exceed the level agreed on under the plan, he added.

Under the plan, Thailand pledged to export no more than 1.973 million tons of rubber this year.

Thailand will also reduce areas planted with rubber trees by 350,000 rais (6.25 rais=1 hectare) under the plan to cut supply.

Ministers also discussed possible cooperation in the rubber glove business in an attempt to boost rubber glove prices, which are now lower than the cost of production, Pitak said. He didn't elaborate further, however.

Thailand is the world's largest rubber exporter, followed by Indonesia and Malaysia.