NEW RUBBER PACT APPEARS IN THE BALANCE
Negotiations on a new International
Natural Rubber Agreement, INRA, are approaching the
make-or-break point and prospects for a future pact appear to
be in the balance, delegates said.
    Manaspas Xuto of Thailand, chairman of the INRA
renegotiation conference, is holding consultations with a small
group of producers and consumers to try to resolve major
outstanding issues. When the talks began on Monday Xuto said
those issues should be settled by the end of the first week to
allow time to draft an agreement during the second week.
    The talks are due to last until March 20.
    Xuto said, "There is nothing concrete yet, but the
atmosphere is good." The discussions are expected to continue
late into the night, and Xuto said he may hold weekend
meetings.
    Delegates said negotiations now focus on the degree to
which price adjustments should be automatic.
    At present, if the market price has been above or below the
reference price (set at 201.66 Malaysian/Singapore cents a kilo
in the current agreement) for six months, the reference price
is revised by five pct or by an amount decided by the
International Natural Rubber Organisation council.
    Consumers are asking that, in these circumstances, the
adjustment be automatic at five pct or more.
    Producers want the council to have the last word and have
resisted reducing its role in the price adjustment procedure.
    Delegates said there seems to be optimism about settling
another issue -- that of the floor price.
    It now appears that consumers may consider dropping their
insistence of a downward adjustment of the floor price, called
the "lower indicative price," under certain circumstances.
    This means that any possible compromise 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"
-- which is set at 150 Malaysian/Singapore cents in the current
pact.
    Delegates said that in exchange for consumer flexibility on
the floor price question, producers may consider agreeing to
another consumer proposal for more frequent price reviews -- at
12 month intervals instead of 18 at present.
 Reuter
