Tin group puts off talks on future of supply quotas

Tin group puts off talks on future of supply quotas

KUALA LUMPUR (Reuter): Major world tin producers yesterday deferred talks on the future of an export quota scheme designed to slash huge stock overhang, but Indonesia remained adamant that the supply restrictions be abandoned.

"The question of whether to extend or end the quotas will be re-examined at the next meeting in Bolivia in September," said a delegate to the Association of Tin Producing Countries (ATPC) executive committee meeting.

Indonesia, which has been actively pushing for an end to the supply curbs, assured members it would abide by its quotas pending an ATPC decision, a senior Indonesian official said.

"The government will abide by the quotas," said Rozik Soetjipto, head of the Indonesian delegation to the meeting.

Indonesia breached its 1994 quota of 30,500 tons and is said to have exported some 34,500 tons last year. The ATPC also groups key global tin producers Australia, Bolivia, China, Malaysia, Nigeria, Thailand and Zaire.

Rozik said he reiterated Indonesia's stand on the need to dismantle the quota scheme. Indonesia said previously it would question the role of the scheme, considered the lynchpin of the Kuala Lumpur-based ATPC, at this meeting.

"I reminded the meeting of the Indonesian position. No decision was taken...we didn't ask others to give their views," Rozik said. "We want them to be prepared when the issue is raised again in Bolivia. We are not pushing for anything now."

Delegates said some members would like to study market developments in the coming months before making a stand.

Jakarta's stance is aimed at freeing state-run PT Tambang Timah, the world's largest tin miner, from external limitations ahead of its stock exchange listing later this year.

The ATPC's quotas, aimed at cutting a world stock overhang estimated at 73,000 tons in March 1987 to around 20,000 tons, were imposed after tin prices collapsed when the International Tin Council ran out of funds to support the market in late 1987.

The quotas capped members' exports at 90,600 tons in 1995, down from 1994's 98,000 tons.

The ATPC said at the close of the meeting on Thursday that tin exports by members fell 18.1 percent to 18,552 tons for the first quarter of 1995 against the same period in 1994.

It said members' tin exports in 1994 totaled 103,220 tons, 5.3 percent above the quota limit of 98,000 tons.

Tin stocks fell to about 37,000 tons early this year but are still higher than the ATPC's stated goal of 20,000.

Some ATPC officials said rising non-ATPC production, smuggling by some members and slow demand growth had kept prices well below average production costs and forced some mine closures.