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.