NEED FOR ASEAN REGIONAL RUBBER MARKET TO MANAGE STABLE PRICE MECHANISM

KUALA LUMPUR, June 18 (Bernama) -- Major natural rubber producing countries
such as Thailand, Indonesia and Malaysia, should seriously consider a joint
venture for the establishment of an Asean Regional Rubber Market to manage an
orderly and stable price meachnism.

Deputy minister of Plantation Industries and Commodities, Hamzah
Zainudin said the target is to balance rubber price at US$3 per kg.

"Over the next six months, rubber prices may stay at between RM8
(US$1=RM3.25) to RM9 per
kg," he added.

"There are huge speculative funds around the world, looking for
opportunities to exploit the short term market sentiment for profit, regardless
of the rubber market fundamentals," he said during the opening ceremony of the
Asean Rubber Conference 2010.

Such unhealthy speculative market activities, he highlighted, caused
unncessary misery to more than three million rubber smallholders, mainly poor
farmers residing in the rural areas.

Hamzah said there should be a price mechanism to balance the needs of
planters and industry players.

"At present, there are already informal meetings taking place on a regular
basis between representatives from Malaysia, Thailand and Indonesia to look at
the price structure.

"What we like to see is a formal mechanism for the fixing price structure,"
he explained.

He also said that too high rubber prices are not realistic as it would
then compete with synthetic rubber which could become cheaper.

He envisaged that in the next seven years, Malaysia could be a major rubber
producing country.

"I believe it is important that we embark on improving the marketing
strategy of branding our natural rubber, not as a purely agricultural crop but
as a sustainable industrial raw material with diversifed uses," he said.

In 2009, Malaysian rubber and rubber product exports totalled RM25 billion,
representing 4.52 per cent of national exports.

-- BERNAMA