Thailand, Indonesia, Malaysia to buy rubber
Thailand, Indonesia, Malaysia to buy rubber
Agence France-Presse, Kuala Lumpur
The world's top three natural rubber producers may absorb about 300,000 tons of the commodity from the open market by April to further boost prices, a report said Monday.
The newly formed International Tripartite Rubber Organization (ITRO) was planning to buy rubber in a bid to strengthen prices, The Business Times newspaper quoted traders as saying.
ITRO -- which groups Thailand, Indonesia and Malaysia -- was formed last December. It established a consortium with a working capital of 225 million dollars last month to purchase, manage and sell rubber in the open market.
Malaysia's Primary Industries Minister Lim Keng Yaik had said the consortium -- yet to be named -- would start operations by April, adding its primary objective was to buy up excess natural rubber to limit supplies and bolster prices.
"The targeted amount to be purchased could possibly be revised higher or lower depending on circumstances," one trader said.
The initiative was already bearing fruit, The Business Times said. The price of rubber had surged 44 percent since the rubber body was formed.
"SMR20 for example had risen 2.65 ringgit (70 U.S. cents) a kilogram last Wednesday from 1.84 ringgit on Dec. 11," the trader said.
The rubber body aims to cut natural rubber production by four percent and reduce exports by 10 percent by year-end.
The three producers planned to cut total production by 155,000 tons this year and 200,000 tons next year. Exports for 2002 would be slashed by 380,000 tons.
ITRO accounts for 85 percent of the world's total rubber output, of which Thailand produced 2.3 million tons last year, Indonesia 1.5 million tons and Malaysia 615,000 tons.
The rubber body is playing the role of now defunct International Natural Rubber Organization (INRO) which was disbanded on October 13, 1999 following the pull-out of Malaysia and Thailand.
They had accused INRO of not doing enough to support prices and that its polices favored the consumer members. INRO was formed in 1980. Its consumer members included the U.S., Britain and Japan. +