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.