NEW RUBBER PACT TO BE FORMALLY ADOPTED TOMORROW
A new International Natural Rubber
Agreement (INRA) will be formally adopted tomorrow, chairman of
the negotiating conference Manaspas Xuto of Thailand said.
    "The successful negotiation of the new agreement represents
a significant step forward in international economic
cooperation," he told a news conference. The new INRA is to
replace the current one which expires in October.
    Delegates at the renegotiation conference, held under the
auspices of the U.N. Conference on Trade and Development
(UNCTAD), reached agreement over the central elements of a new
accord last weekend.
    Xuto said the new INRA retains the reference price -- of
201.66 Malaysian/Singapore cents per kilo -- and indicative
prices set in the present pact.
    Price levels will continue to be expressed in the joint
Malaysian/Singapore currency, he added.
    The new agreement also maintains the basic structure of
price ranges -- the "may sell" and "may buy" points at plus and
minus 15 pct of the reference price, as well as the "must sell"
and "must buy" zones at plus and minus 20 pct of it.
    Xuto said the new pact maintains the same objectives that
were set in the present accord. "The most important of these are
to stabilise prices and to achieve a balanced growth between
demand and supply," he said. The buffer stock remains the sole
instrument of market intervention for price stabilisation and
its maximum capacity is unchanged at 550,000 tonnes, Xuto
added.
    At this month's session, which was the fourth attempt in
two years to negotiate a new INRA, the main issue to be
resolved concerned the mechanism for adjusting the reference
price.
    It was agreed to conduct reviews of the reference price
every 15 months -- instead of the current 18-month intervals.
    The extent of the adjustment was also modified.
    Under the present agreement if the daily market indicator
price has been above the upper intervention ("may sell") price
(currently 231 Malaysian/Singapore cents) or below the lower
intervention price ("may buy") price (171 cents at present) for
six months, the reference price is then revised by five pct or
whatever amount the International Natural Rubber Council
decides.
    Under the new pact, the adjustment under these
circumstances will be five pct unless the Council decides on a
higher adjustment.
    Similarly, when buffer stock purchases or sales amount to
300,000 tonnes, there would be an automatic adjustment of three
pct under the new accord unless the Council decides on a higher
percentage.
    Throughout the talks, which began on March 9, producers had
strongly opposed a consumer proposal to lower the reference
price and the "lower indicative price" (or floor price) of 150
cents in the present pact if the buffer stock, currently
360,000 tonnes, reached 450,000 tonnes.
    The proposal, initiated by the U.S., was withdrawn last
Friday, setting the stage for compromise at the weekend.
    Since then negotiators have worked on the finer details of
the new pact.
    On the question of conditions for entry into force of the
new INRA, Xuto said it was tentatively agreed that governments
accounting for 75 pct of world exports and 75 pct of world
imports approved or ratified the new agreement before it became
operational.
    The present agreement had a figure of 80 pct.
 Reuter
