ITRC, IRCO Urged To Expedite Establishment Of Regional Rubber Mart

KUALA LUMPUR, Dec 4 (Bernama) -- The International Tripartite Rubber Council (ITRC) and International Rubber Conference Organisation (IRCo) were urged to expedite the establishment of a regional rubber market (RRM) within three months if possible. In a statement Thursday, ITRC said, two technical working groups were set up to accelerate the drafting of related by-laws and exchange rules and regulations, including technical specifications and arbitration resolution procedures. At the ITRC Ministerial Committee Meeting 2015 in Jakarta on Thursday, the ministers welcomed the progress on the establishment of the RRM which will originally be by June 2016. The meeting was represented by Thailand, Indonesia and Malaysia (TIM). It was chaired by Thomas Trikasih Lembong, Minister of Trade of Indonesia and attended by Gen. Chatchai Sarikulya, Minister of Agriculture and Cooperatives of Thailand and Douglas Uggah Embas, Minister of Plantation Industries and Commodities of Malaysia. At the meeting, the ministers acknowledged the commitment of Vietnam to join the council as a strategic partner. "The participation of Vietnam as a strategic partner of ITRC will increase the council's shares of global natural rubber (NR) production to 74.3 per cent and will allow for better coordinated actions to address NR prices," the ministers said in a joint statement issued from Indonesia. The ministers expressed concerns on the prevailing low NR prices which were below the cost of production despite declining global NR stock and production. Citing the International Rubber Study Group (IRSG) report, the ministers said the global NR stock in September 2015 was 2.8 million metric tonnes (MTs) compared with 3.2 million MTs in 2014. LMC International reported two million MTs of global NR stock as at end-September 2015 which is 0.8 million MT lower than IRSG's figure, the statement said. The ministers said the NR production by the 11-member countries of the Association of Natural Rubber Producing Countries, which accounted for 92 per cent of global NR production was expected to decrease by 0.1 per cent from 10.95 million MTs to 10.94 million MTs. The ministers said the decline in production was contributed by the low NR prices, as smallholders had switched to other economic activities. They also observed the increase in NR domestic consumption in TIM. "This is consistent with the call to increase NR domestic consumption up to 10 per cent annually made at the last ministerial committee meeting in Kuala Lumpur," the statement said. The ITRC said the Demand Promotion Scheme Committee reported that TIM’s domestic NR consumption increased by 5.9 per cent from 1.58 million MTs in 2014 to 1.67 million MTs 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. The three countries also mutually agreed to use up to an additional 300,000 tonnes of NR annually for road construction in 2016. Other areas include rail rubber pads, dock fenders and other infrastructure projects. The ministers recognised the critical importance of innovation, and therefore have instructed the ITRC and IRCo to launch a global prize competition for inventive/creative new ideas for new uses of NR. The ministers also urged the private sectors in TIM to cooperate towards ensuring fair and remunerative prices. "Both government and private sectors in TIM also must take innovative strategies to discover new usage of NR products in 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," the ministers said. 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 NR industry. The ministers said emphasis was given on issues related to NR prices, prevailing market sentiment and measures that could be implemented to strengthen NR prices. --BERNAMA