Sri Lanka to quit INRO due to financial burden
Sri Lanka to quit INRO due to financial burden
COLOMBO (Reuters): Sri Lanka wants to pull out of the
International Natural Rubber Organization (INRO) because it can
no longer afford membership, government and trade officials said
on Wednesday.
Sri Lanka has submitted a letter indicating its intention to
withdraw from the INRO to the UN trade and development agency
UNCTAD, said Sunil de Silva, additional secretary at the ministry
of plantations.
"We have no other alternative because of the economic problems
of being a member of INRO," de Silva told Reuters.
Declining local production and prices made it difficult for
the country to pay its membership fee and funds to maintain the
group's buffer stock, he added.
The membership fee runs into $19,000 annually, de Silva said.
In addition, Sri Lanka has to contribute funds towards
maintaining INRO's buffer stocks.
But INRO's acting executive director Gerard Loyen said in
Kuala Lumpur the organization was unaware of Sri Lanka's
intention to quit the world rubber body.
"To date we have not received anything or heard anything to
that effect," he said in response to the Sri Lankan statement.
De Silva was not immediately available to respond to Loyen's
statement.
The chairman of the Colombo Rubber Traders' Association (CRTA)
said the financial burden of membership on Sri Lanka would
increase as a result of Thailand and Malaysia leaving INRO.
"Sri Lanka's decision to withdraw is mainly because the
financial burden will become somewhat unbearable," said William
Tissa Ellawala, chairman of CRTA.
INRO's survival is already under threat from Malaysia and
Thailand, which have said they will leave the organization.
The two countries, which together account for more than half
of the world's rubber production, are upset over consumer
members' reluctance to support higher prices.
Kuala Lumpur-based INRO is the world's oldest and last
commodity pact with economic clauses. It aims to stabilize rubber
prices by buying and selling rubber in the market at rates pre-
determined by producers and consumers.
"Sri Lanka being such a small producer, I don't think it would
have any affects other than to further weaken the INRO," Ellawala
said, adding that local prices will not be influenced.
He said current local rubber prices have been propped up by
domestic demand and heavy rains that had slashed supply.
De Silva said local rubber consumption had also risen to 48
percent of total production last year and with international
prices declining the government was promoting value addition.
"If we can consume more rubber locally, we can have good
prices for our latex," he added.
Sri Lanka's rubber production in January this year rose 26
percent to 9.2 million kg against 7.3 million kg in the same
month in 1998. Total output in 1998 was 104.2 million kg, down
1.5 percent from the 105.8 million kg produced in 1997, the
Central Bank said.
INRO comprises six rubber producers and 16 consumer countries.
The producing members are Thailand, Indonesia, Malaysia, Ivory
Coast, Nigeria and Sri Lanka.
Consumer members are the United States, Japan, China, Germany,
France, Austria, Belgium plus Luxembourg, Denmark, Finland,
Greece, Ireland, Italy, the Netherlands, Spain, Sweden and
Britain.