RUBBER TALKS CHAIRMAN CITES SLIGHT PROGRESS
There has been slight progress towards
reaching a rubber pact, the chairman of a United Nations
conference on a new International Natural Rubber Agreeement,
INRA, Manaspas Xuto of Thailand, said.
    "There has been some slight progress but it is not the end
of the road yet," he said.
    The conference, which began Monday, is seen as the last
effort to adopt an accord to replace the current one which
expires in October. Some 40 producing and consuming countries
are taking part in the two-week meeting.
    Xuto said if the key outstanding issues are not resolved by
tomorrow he would hold weekend meetings.
    At the beginning of the conference, the fourth such meeting
in nearly two years, Xuto said it was imperative to settle
those issues this week so that technical drafting work can be
done next week.
    Conference sources said it is highly unlikely that
producers will accept a pact that will provide for any possible
downward adjustment of the floor price, as proposed by
consumers under certain circumstances.
    The sources said this means that any possible adjustment
would centre on the reference price, and the "may buy" (or "may
sell") and "must buy" (or "must sell") levels without changing the
"lower indicative price" (or floor price) of 150
Malaysian/Singapore cents a kilo in the present pact.
    The present five-day average of the indicator price is
around 192 Malaysian/Singapore cents.
    Consumers are seeking an adjustment of the reference price,
set in the current accord at 201.66 Malaysian/Singapore cents a
kilo, and of the "lower indicative price" if the buffer stock,
currently 360,000 tonnes, rises to 450,000 tonnes.
    Consumers want price reviews at 12-month intervals instead
of the 18 at present, and the price revision mechanism to
respond automatically to market trends.
    At present, if the market price has been above or below the
reference price for six months, the reference price is revised
by five pct or by an amount decided by the International
Natural Rubber Organisation council.
    Consumers say that, in these circumstances, the adjustment
be automatic at five pct or more.
    Producers have resisted reducing the role of the council in
the price adjustment procedure and have expressed concern that
changes proposed by consumers would weaken the present pact.
 Reuter
