The world's top three natural rubber-producing nations have given the final go-ahead to start up an international rubber cartel, nearly two years after first agreeing to do so.
The final agreement to begin the operations of the International Rubber Co. Inc.-formerly known as the International Tripartite Rubber Organization-came at a time when world NR prices have reached their highest point in years.
Accompanied by their countries' prime ministers, cabinet officers from Thailand, Indonesia and Malaysia signed the final IRCO agreement at an Oct. 6 ceremony in Bali, Indonesia.
The consortium is supposed to be funded with $225 million from the member governments, $100 million from Thailand, $75 million from Indonesia and $50 million from Malaysia. However, so far the three countries have ponied up only $4.5 million, according to the Dow Jones News Service.
Sang Udomjarumani, a director of Thai Rubber Latex Crop Corp. P.L.C., is the likely choice to serve as CEO of the IRCO, the report said.
Meanwhile, the news from Asia on the world NR market is bullish, thanks to lower supplies and stronger demand, particularly from the booming economy of China.
Trading in Singapore, both Technically Specified Rubber 20 and Rubber Smoked Sheets 3 reached the neighborhood of 54 cents per pound Oct. 7.
Most rubber traders in the Far East reacted to the IRCO signing with indifference, saying that supply and demand-not the tripartite agreement-as always would determine pricing in the market, the news report said. Several U.S. rubber traders did not return calls at presstime.
Strong demand for NR, meanwhile, is persuading a number of Southeast Asian governments to encourage their nations' NR businesses.
This year, according to news reports, the Philippine Department of Agriculture will launch a plan to increase local rubber plantings by 37,500 acres annually for the next five years, thus nearly doubling the country's current rubber acreage.
Last spring, Vietnam announced it would have some 1.25 million acres planted with rubber trees by 2010.