The International Rubber Consortium has eliminated controls on natural rubber exports imposed last December following a drastic fall in prices, the chief executive said Thursday.
IRCo had targeted an export reduction of 700,000 metric tons in 2009 after prices fell sharply late last year.
"We have achieved our objective -- prices have recovered, supply is tight and stocks are low. It is no longer necessary to control exports," Abdul Rasip Latiff told Dow Jones Newswires.
He said the decision was made during IRCo's recent meeting in Langkawi, Malaysia.
IRCo comprises the world's largest natural rubber exporters -- Thailand, Indonesia and Malaysia -- which control around 70% of the world's natural rubber supply.
Natural rubber futures on the Tokyo Commodity Exchange settled Thursday at Y253.1 a kilogram, a level not seen since October last year. Prices had slumped to almost Y100/kg in December 2008.
"The market is holding quite nicely...current price levels are attractive for producers," said Abdul Rasip.
He added IRCo now wants prices to move on their own instead of being guided by export curbs.
Due to weak demand in the first half of 2009, natural rubber exports from IRCo countries had already declined by around 600,000 tons.
"Demand has now started to pick up and we hope the global economic recovery will be steady," said Abdul Rasip.
He added IRCo's Agreed Export Tonnage Scheme can be used again if the need arises. Under the scheme, exporters are allocated quotas based on the volumes they shipped the previous year, which serves as a control on global supply.
IRCo had also set a target of reducing production by 215,000 tons through replanting on top of a commitment to leave 700,000 tons of rubber untapped, resulting in a total supply cut target of 915,000 tons for 2009.
Since complete data on replanting aren't yet available, the scenario will be reviewed after the end of the year, said Abdul Rasip.
(Source: http://irco.biz)
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