Tin producers defer scrapping quota system

Tin producers defer scrapping quota system

KUALA LUMPUR (Reuter): Key tin producers said yesterday they
have deferred scrapping a tin export quota system as scheduled in
June and will re-consider the matter at a ministerial meeting in
Singapore in September.

The Association of Tin Producing Countries (ATPC) had been
expected to confirm the abolition of the Supply Rationalization
Scheme (SRS) at the three-day executive council meeting which
ended in Kuala Lumpur yesterday.

But an ATPC spokesman told reporters the meeting failed to
agree on revoking the export restrictions or on alternatives to
the plan as agreed at the ATPC ministerial meeting in Santa Cruz,
Bolivia, last year.

"The official position of the ATPC is that there will be a
sort of vacuum where the quota is concerned between June and
September," said the spokesman. "It will be in a limbo.

He did not give any reasons for the council's hesitation. But
industry sources said they believed it could be because producers
had kept below recent export targets set by the ATPC.

The quota system was created to stabilize tin prices after the
collapse of the International Tin Council in 1985. But the system
had been largely ignored in the past by some members who over-
produced.

The ATPC groups Australia, Bolivia, China, Indonesia,
Malaysia, Nigeria, Thailand and Zaire. The Kuala Lumpur
conference was not attended by Australia and Zaire.

The ATPC said in a statement after the meeting that exports by
members for 1995 totaled 100,023 tons -- 10 percent above quotas
for the year.

It, however, noted that major producer Brazil exported 10,200
tons or 64 percent below the limits set by the ATPC. Brazil is a
non-ATPC member but agreed to abide by ATPC quotas.

The ATPC also said that in the first three months of this year
exports totaled 23,844 tons or six percent below quota. Brazil's
estimated export of 3,000 tons during this period was 58 percent
below restriction.

"I think the council is having second thoughts about revoking
the quota system after finding many countries producing below the
set limits," said a Malaysian tin trader.

"Also, in the absence of the quota, the role of the ATPC would
become questionable," he added.

The ATPC statement said that the association would continue to
"monitor the tin market situation and report to the executive
council to enable it to consider all options, including the SRS,
in the ATPC's effort to stabilize the tin market."

The Kuala Lumpur meeting noted Brazil's reaffirmation to join
the ATPC and concern over a plan by the United States Defense
Logistics Agency (DLA) to replace daily spot tin sales with long-
term contracts.

"If the proposal is approved, it would mean that there would
be no transparency left in DLA sales and producers would have
difficulties in monitoring such sales," the statement said.