Joint Communiqué/Media Release
International Tripartite Rubber Council (ITRC)
Ministerial Committee Meeting 2015
Thursday, 3 December 2015
Related Post
Jakarta, Indonesia
1. The Ministerial Committee Meeting of the International Tripartite Rubber Council (ITRC) was held in Jakarta, Indonesia on Thursday, 3 December 2015. The ITRC was represented by Thailand, Indonesia and Malaysia (TIM). The ITRC Ministerial Committee Meeting was chaired by H.E. Thomas Trikasih Lembong, Minister of Trade of the Republic of Indonesia and attended by H.E.General Chatchai Sarikulya, Minister of Agriculture and Cooperatives of the Kingdom of Thailand and H.E. Datuk Amar Douglas Uggah Embas, Minister of Plantation Industries and Commodities of Malaysia.
2. The Ministers reiterated the role of the Ministerial Committee Meeting as an important annual platform for Ministers-in-charge of rubber from member countries of ITRC to meet and discuss issues related to sustainable development of the natural rubber (NR) industry. Emphasis is given on issues related to NR prices, prevailing market sentiment and measures that could be implemented to strengthen NR prices.
3. The Ministers expressed their concerns on the prevailing low NR prices which are below the cost of production despite declining global NR stock and production. It was reported by the International Rubber Study Group (IRSG) that global NR stock in September 2015 was 2.8 million MT compared with 3.2 million MT in 2014. While, LMC reported 2.0 million MT of global NR stock as at end September 2015 which is 0.8 million MT lower than IRSG’s figure.
4. The Ministers also noted that the NR production by the 11 member countries of the Association of Natural Rubber Producing Countries (ANRPC) which accounts for 92% of global NR production is expected to decrease by 0.1% from 10.95 million MT to 10.94 million MT. The decline in production was contributed by the low NR prices, as smallholders have switched to other economic activities. Protracted low NR prices will have an impact on rubber smallholders welfare in TIM.
5. The Ministers instructed ITRC to immediately start a study to be completed within one month for the possibility of implementing a subsequent Agreed Export Tonnage Scheme (AETS) in 2016.
6. The Ministers welcomed the progress on the establishment of a Regional Rubber Market (RRM), which is an initiative of member countries in providing a platform for better price discovery and effective hedging functions which would ultimately benefit the producers, consumers and market players around the world. In this regard, two Technical Working Groups have been established to accelerate the drafting of related Bye-Laws and Exchange Rules and Regulations including technical specifications and arbitration resolution procedures. Even though, the RRM is to be established by June 2016, but the 3 Ministers urged ITRC/IRCo to expedite the establishment to be within 3 months to the extent possible.
7. The Ministers observed the increase in NR domestic consumption in TIM. This is consistent with the call to increase NR domestic consumption up to 10% annually made at the last Ministerial Committee Meeting in Kuala Lumpur, Malaysia. The Demand Promotion Scheme Committee (DPSC) reported that TIM’s domestic NR consumption increased by 5.9% from 1.58 million MT in 2014 to 1.67 million MT in 2015. The increase in part, was contributed by the use of NR in rubberised road construction and increase in locally manufactured rubber based products.
8. The three countries also agreed jointly to use up to an additional 300,000 tonnes of natural rubber annually for road construction starting in 2016. Other areas include rail rubber pads, dock fenders and other infrastructure projects. In this context, the three countries will exchange technology and expertise in the use of NR for new road construction and resurface.
9. The Ministers recognise the critical importance of innovation, and therefore have instructed the ITRC/IRCo to launch a global prize competition for inventive/creative new ideas for new uses of NR.
10. The Ministers also urged the private sectors in TIM to cooperate towards ensuring fair and remunerative prices. Both government and private sectors in TIM must take innovative strategies to discover new usage of NR products including in the consumer, industrial, environment and construction sectors to ensure higher uptake of NR and contributing towards remunerative price for the smallholders. This will benefit the NR smallholders who form the backbone of the upstream sector.
11. The Ministers acknowledged the commitment of Vietnam to join ITRC as a strategic partner. The participation of Vietnam as a strategic partner to ITRC will increase ITRC’s shares of global NR production to 74.3% and will allow for better coordinated actions to address NR prices.
3 December 2015
Jakarta, Indonesia
