U.S. rubber producers want INRO to survive

U.S. rubber producers want INRO to survive

KUALA LUMPUR (Reuters): U.S. rubber manufacturers want the International Natural Rubber Organization (INRO) to survive and hold out hope it can weather Malaysia's withdrawal, an industry official said on Wednesday.

"We have voiced our support for INRO. We are optimistic that if all parties work together, the pact will function," said Donald Shea, president and chief executive officer of the U.S. Rubber Manufacturers Association.

He said INRO had succeeded in stabilizing rubber supply and prices for decades, although it failed to prop up sagging rubber prices recently.

"We have been with INRO for 20 years and it has proven to be effective," Shea told Reuters in the Malaysian capital. He was in Kuala Lumpur for this week's meeting of INRO's governing council which will consider the fate of the organization.

Shea sees some hope of salvaging the pact, the world's last commodity accord with economic clout.

"My view is that as long as a member remains a member, there's always hope. The issue to address is how to make it work more effectively," he said.

Industry officials say INRO is doomed to collapse with the withdrawal of Thailand and Malaysia, which together account for more than half of the world's production.

Malaysia leaves INRO on Oct.15 after a one-year notice period while Thailand has said it will quit. Both countries say INRO has failed to shore up rubber prices, now at long-term lows.

As a representative of rubber consumers, Shea said his main concern was to see stable natural rubber supplies. He questioned what would happen to the rubber industry without INRO.

"The big issue is what, if anything, replaces INRO," he said. "It's like Humpty Dumpty. If Humpty Dumpty falls off the wall, we know it will not be easy to put it back together again."

INRO groups six rubber producing and 16 consuming countries.

The producers are Thailand, Indonesia, Malaysia, Ivory Coast, Nigeria and Sri Lanka.

Consuming members are the United States, Japan, China, Germany, France, Austria, Belgium, Luxembourg, Denmark, Finland, Greece, Ireland, Italy, the Netherlands, Spain, Sweden and Britain. Belgium and Luxembourg are considered one.