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Natural rubber producers expected to map out strategy to revive prices

BANGKOK: Although rubber producing countries generally agree that the current prices are low, they are still looking for solutions.

The Association of Natural Rubber Producing Countries will meet on Oct 13 in Kuala Lumpur, and among the agenda will be the position of the natural rubber market in the world.

Meanwhile, Malaysia is also proposing to bring forward the International Tripartite Rubber Council (ITRC) meeting scheduled for Dec 12 to sometime in early November to resolve some of the outstanding issues on cooperation in the rubber industry.

“We are all very concerned about the prevalent rubber prices because they have dropped to a very critical level,” said Minister of Plantation Industries and Commodities Datuk Amar Douglas Uggah Embas.

“Every night, I pray to God to give me an insight on when the price will go up,” he said when asked when the prices will recover.

“There is a need for producing countries to put our heads together and collaborate to make sure that the price won’t fall or become depressed,” said Uggah, who headed a Malaysian delegation to Thailand from Oct 5 to 7 to discuss the rubber issue.

Uggah described his discussion on the rubber issue with Thailand Minister of Agriculture and Cooperatives Petipong Puengbun Na Ayudhya here on Monday as fruitful.

Uggah said the discussion was on how Malaysia and Thailand can work out short- and long-term strategies to revive rubber prices, and officials from both countries will sit down and make some short- and long-term proposals on how to assist the rubber industry.

On the stockpile issue, he said there is some question about the accuracy of the statistics because as far as the producers are concerned stocks are very low “but there are people out there who still say stocks are very high.”

How to upgrade the statistics to make sure the figures are accurate is one issue that will be deliberated upon, he added.

He said Indonesia’s proposal not to sell below US$1.50 per kg will be on the agenda at the meeting of rubber producers.

Malaysia supports the move, but some implementation issues need to be ironed out, he said.

“When we make it a policy, we like it to be effective. We want to see all buyers and sellers make it a working formula,” he explained.

He said unlike with the floor price, when the rubber price drops and the countries have to come into the market to support the price, the proposal is for an agreement that everyone will hold on to their stocks if the price falls below US$1.50 per kg.

In Malaysia at the moment, SMR 20 rubber is in the range of RM4.40 to RM4.55 per kg.

“Everyone thinks the price now is low,” said Petipong, speaking separately to the media on Monday when asked for his opinion on the rubber prices.

There are many reasons for the low prices, the main one being that the producers have not been successful managing supply as when rubber prices go up, people will grow more rubber, Petipong added.

Cooperation among the producers will increase the likelihood of better prices for natural rubber now and in the future, he said.

“We actually wanted to meet four to five countries, but unfortunately, Indonesia now is in the process of changing to a new government. So we are not able to meet Indonesia at the moment,” he said.

Although the solutions have not been finalised, he expressed optimism that there would be cooperation.

– newsabahtimes.com.my

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