UN negotiator to chair KL rubber talks

UN negotiator to chair KL rubber talks

KUALA LUMPUR (AFP): UN negotiator Peter Lai will chair crucial talks between key rubber producers and consumers here next week in a last ditch bid to bridge their differences and ensure conclusion of a new price accord in Geneva in October.

Producers, led by spokeswoman Rosediana Suharto of Indonesia, will be represented by Thailand, Indonesia and Malaysia at the July 12-14 talks with leading consumers Japan, the United States and the European Union, officials said yesterday.

Lai, president of the United Nations Conference on Natural Rubber, is to meet informally with the six members of the Kuala Lumpur-based International Natural Rubber Organization (INRO), before the UN-sponsored negotiations are held in Geneva from Oct. 3 to Oct. 14.

"This is the second and most likely the final round of informal consultations Peter Lai will have with producers and consumers before the Geneva negotiations for the new pact," said Pong Sono, executive director of INRO, which groups six producers and 20 consuming nations.

The expired 1987 International Natural Rubber Agreement, which succeeded a 1979 accord, had since been extended for a year to December awaiting conclusion of the successor pact.

Producers are asking for a higher reference price in the new accord to provide for earlier intervention in a depressed rubber market. But consumers want the accord provisions to remain unchanged, arguing they had worked well in stabilizing the market for the last 14 years.

"Prices may be higher now. But we don't know whether they will sustain, say, five years down the road," said Sucharit Promdej, executive director of the Association of Natural Rubber Producing Countries.

"A lot of changes have taken place and have affected the course of rubber production. Output is already declining fast and will be further eroded if prices are not remunerative enough for producers to remain in rubber," warned Sucharit.

Thailand, which is now the world's largest producer, having overtaken Malaysia since 1988, is facing shortage of skilled tappers especially in the estate sector, Sucharit said.

Rubber prices, of mainly consumer grades, were bouncing back in recent months in the wake of tightening supply, with INRO's indicator price fast rising to a level that will make it mandatory for the buffer stock manager to unload his 220,000- ton stockpile.

INRO's indicator was on Wednesday at 231.75 Malaysian- Singapore cents a kilogram (2.2 pounds), edging towards the "must-sell" trigger of 236 Malaysian-Singapore cents.