Top rubber nations endorse support plan
Top rubber nations endorse support plan
BATAM, Riau (Reuters): Senior officials from the world's top rubber exporters - Thailand, Indonesia and Malaysia - agreed a scheme to support ailing natural rubber prices that have lingered near 30 year lows, delegates said on Friday.
But the plan has still to be approved by ministers from the three countries and a date for the ministerial meeting will be announced later.
"What I can say is that the meeting is successful and we have reached an agreement on a minimum selling price, stock withholding as well as forward sales," said Dheerayutha Kantaratanakul, director of Thailand's state-owned Rubber Estate Organization.
He declined to give further details.
"There is a positive result of the meeting," said Herry Soetanto, director for Multilateral Cooperation at Indonesia's Ministry of Industry and Trade.
Commenting on the minimum selling price, a Thai official said "It is a very good price level... the price would be a two digit number per kg," he told Reuters, but declined further details.
Other officials denied market talk that the price would be 68 cents a kg, and commented that it was not possible to apply just one price to the different grades of rubber produced by the three countries.
On stock withholding, officials said that no overall amount had been set for the three countries.
"There is no need to set the amount of stock to be withheld in each country... it can work well by only setting a minimum selling price," Dheerayutha said.
On forward sales, a Thai official said: "We would say that up to three months forward for exporters to sell contracts in advance is the most suitable.".
The date of the ministerial meeting to approve the rubber scheme has yet to be decided as Indonesia says its trade and industry minister is not available in December and Thailand prefers the meeting to be held before elections on January 6.
Asian rubber traders have reacted skeptically to attempts by the three largest producers to set a minimum selling price saying the plan will be difficult to implement and hard to finance.
But governments of Thailand, Indonesia and Malaysia are aware that the rubber industry is an important political force.
Unlike palm oil, most rubber output in the area is from small holdings, many less than two hectares in size.