Rubber producers, users to decide on INRO fate

Rubber producers, users to decide on INRO fate

KUALA LUMPUR (Reuters): Rubber producing and consuming
countries will meet in the Malaysian capital next week with the
outcome likely to determine the future of the International
Natural Rubber Organization (INRO).

Industry sources said it will be a crucial meeting to prevent
a collapse of the world's only surviving producer-consumer
commodity grouping.

"It will be crucial in that sense," a Malaysian official said.

Various committees within the organization will meet on
Tuesday and Wednesday before full council talks on October 22 and
23.

"Important matters will be raised. It can be crucial," INRO
deputy executive director Gerard Loyen told Reuters.

INRO runs a serious risk of foundering due to mounting
opposition from producing countries over its failure to boost
prices.

INRO intervenes in the rubber market by buying or selling when
the price reaches pre-set levels and the price range is revised
periodically in line with market trends.

But prices have suffered relentless pressure from tumbling
consumption due to the Asian economic crisis and rising exports
from Thailand and Indonesia where producers have cashed in on
high local prices driven by depreciating currencies.

Malaysia, the world's third largest producer, has vowed to
leave INRO, while top producer Thailand has said it is likely to
follow suit. But Indonesia, the second largest producer, has
pledged to stick by the accord.

Analysts said if Malaysia and Thailand were to leave, it could
lead to INRO's demise because they hold a big chunk of votes on
the producing countries' side.

INRO, which was set up in 1980 under the United Nations
Conference on Trade and Development (UNCTAD), groups six rubber
producing and 16 consuming countries.

The producers are Thailand, Indonesia, Malaysia, Ivory Coast,
Nigeria and Sri Lanka. Consuming members are the United States,
Japan, China, Germany, France, Austria, Belgium plus Luxembourg,
Denmark, Finland, Greece, Ireland, Italy, the Netherlands, Spain,
Sweden and Britain.

The rubber body expects some progress to be made during the
meeting to heal the rift.

"We look forward to some kind of progress through measures to
be proposed and discussed at the meeting. We expect both
exporters and importers to be positive to reach a consensus,"
Loyen said.

INRO in its latest newsletter urged both rubber producing and
consuming countries to work together with the organization and
"not without INRO".