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.
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