Thailand withdraws from world rubber group INRO

Thailand withdraws from world rubber group INRO

BANGKOK (Reuters): Thailand, the world's largest natural
rubber producer and exporter, decided on Tuesday to withdraw from
the global price pact, the International Natural Rubber
Organization (INRO).

"INRO is useless for natural rubber producers but more useful
for rubber consumers. So I think it is appropriate for us to
leave," Deputy Agriculture Minister Newin Chidchob said.

Thailand's move is likely to prove fatal for INRO, which was
set up in 1980 to stabilize volatile world rubber prices under
the auspices of the United Nations Conference on Trade and
Development (UNCTAD).

Thailand is the biggest contributor to INRO on the rubber
producer side and its withdrawal follows a similar move by
Malaysia at the end of last year.

Newin, speaking to reporters after emerging from a cabinet
meeting, said Thailand had decided not to pay contributions worth
401 million baht (US$10.84 million) to INRO's buffer stock
account for the new round of intervention.

He said that Thailand by itself had to spend billions of baht
per year to shore up rubber prices in the local market but INRO
had failed to raise rubber prices in the world market.

INRO's main purpose is to stabilize world rubber prices by
buying when the prices drop sharply and selling when prices
surge.

It comprises six rubber producers and 16 consumer countries.

The rubber producing members are Thailand, Indonesia,
Malaysia, Ivory Coast, Nigeria and Sri Lanka.

The consuming country members are the United States, Japan,
China, Germany, France, Austria, Belgium plus Luxembourg,
Denmark, Finland, Greece, Ireland, Italy, the Netherlands, Spain,
Sweden and Britain.

Each member country has a different number of votes, depending
on the size of their exports or imports. Contributions to the
organization are based on the number of votes each member
carries.

"We will not pay our contribution worth 401 million baht in
cash call to INRO," Newin added.

In its latest cash call to Thailand, INRO required payment by
Thailand of this sum by Tuesday as its contribution to support
intervention in the sagging rubber market.

The minister said Thailand's next step was to send a proposal
to the United Nations to confirm its withdrawal and officially
announce the decision to INRO.

The world's three top producers -- Thailand, Indonesia and
Malaysia -- have all indicated unhappiness with INRO in recent
months.

Malaysia has already served notice of withdrawal from INRO
effective Oct. 15, 1999. Indonesia has said it will not withdraw
from the organization.