Rubber producers pin hopes on output cut to boost prices
Rubber producers pin hopes on output cut to boost prices
KUALA LUMPUR (Reuters): Asian rubber producers, against a
background of regional crisis, agreed at a meeting on Wednesday
to cut output in an attempt to lift sinking prices, officials
said.
"Producers have agreed at the meeting to cut production.
Thailand will cut by at least 10 percent," Sanit Samosorn, deputy
director-general at Thailand's agriculture department, told
Reuters at the end of the meeting among leading producers.
"If prices do not recover, we will take stronger measures," he
added, without giving further details.
Thailand, the world's biggest rubber producer and exporter,
was expected to produce 2.2 million tonnes this year and 80
percent of that would be exported.
Rubber prices have plunged since Asia's financial crisis
started in July last year and there are no signs of a recovery in
demand.
Producers have hit out hard at the International Natural
Rubber Organization (INRO), saying the market-stabilizing body
must go after failing to support the market.
INRO groups major producing and consuming countries. It buys
and sells at set levels to stabilize prices.
Producers have tried in vain in the past few months to get
INRO to raise its buying levels to support the market.
Producing countries discussed production and marketing
strategies at the three-day, closed-door meeting of the
Association of Natural Rubber Producing Countries (ANRPC), but
officials disclosed few details of the discussions.
"The agreement of the meeting will go back to member
countries," ANRPC secretary-general Gnoh Chong Hock said.
The ANRPC groups Thailand, Malaysia, Singapore, Sri Lanka,
India, Papua New Guinea, Indonesia and Vietnam. Indonesia and
Vietnam were not present at the meeting.
"Activities for implementing these strategies will be
submitted to the ANRPC assembly scheduled to be held in Vietnam
in November 1998," ANRPC said in a statement released at the end
of the meeting.
"In the interim, individual countries will work out their
respective mechanism to initiate measures to adjust supply to
stabilize prices," it said.
Industry sources have said it would be hard to implement
output or export controls as most Asian countries needed hard
currency from exports during the crisis.
"Theoretically producers will carry out measures such as
export and supply controls after the meeting, but it's hard to
tell how much can be done when times are bad," said one delegate.
Most delegates shared the same view of INRO's future.
"We will definitely leave INRO, no matter what other countries
will do," said a Malaysian official.
Sopon Watcharasint, a director at Thailand's ministry of
agriculture, said INRO should be allowed to become history.