Top rubber producers alliance to begin operations
An alliance grouping the world's top three rubber producers - Malaysia, Thailand and Indonesia - would begin operations this month to boost rubber prices, a minister said today.
Primary Industries Minister Lim Keng Yaik said the key task of the Thai-based consortium was to stabilise rubber supply by buying and managing excess stocks from the three countries.
Lim said rubber prices had fallen sharply at the end of last year to 0.45 US cents a kilogram, down sharply from the pre-financial crisis prices in 1997 at US$1.05 and in 1995 at US$1.50.
The consortium would be owned and financed by the three countries, Lim was quoted as saying by Bernama news agency.
The move followed an agreement by the three countries in December to form the International Tripartite Rubber Organization to combat oversupply and low prices.
Equity ratio
Lim said the consortium would be registered in Thailand with an initial agreed capital of US$225 million, with the call-up capital at 25 percent of the amount.
The three producers would participate in the equity ratio of Thailand two, Indonesia 1.5 and Malaysia one, he said, adding the consortium was expected to be in operation by March 30.
Apart from forming the consortium, the three countries have also agreed to cut back production by four percent each in 2002 and 2003 and to reduce exports by 10 percent. (AFP)
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